Not that I know the entire implementation but I believe the phone has secure-element hardware that decouples sensitive material from the rest of the device. Therefore, in theory, attacking “the phone” gives you no access to (say) a credit card number. This should be a relatively small attack surface.

Correct, even if IOS is root level compromised it doesn't matter, as the secure element is a self contained hardware security module:

https://en.wikipedia.org/wiki/Hardware_security_module

What about Android phones, which are over 80% of the market?

Nope, most android phones (that I'm aware of) lack a dedicated HSM. The iPhone 6+ was I believe the first general consumer phone that shipped with a HSM. Being a linux guy through and through, it is/was the reason I got a 6+ and I couldn't be happier. It isn't perfect, but it is a huge improvement over most other things out there.

Motorolla has the horribly overpriced AME 2000 (ick), and Samsung has the knox platform built standard into most of their stuff (which is very good), but they lack a true HSM. If you're an android user and want a HSM for sensitive data, get one of the Microcrypt SD devices. It is as good as you'll get (and still not as good as an iPhone).

Apple Pay generates a unique credit card # for every transaction, ensuring a compromise of one merchants system will never end up in the ability for hackers to use your card for any other transactions.

Unique card # per transaction is the holy grail of security.

Your claims of somehow compromising confidentiality are also provably false.

> Your claims of somehow compromising confidentiality are also provably false.

What's the point of saying something is provably false and then completely leaving out any reference to that proof?

Then prove them as false?

There is a reliance on the security of the local device that isn't an issue with cards. Primarily this is more of a social engineering concern anyway, rendering most technical solutions useless.

Last year there was an article how Apple Pay was making it easier for scammers to use cards. I believe this particular vector was patched by having to authenticate that you are trully adding your card via bank authorization. However, Mobile Payment is susceptible to fraud and thieves will find a way.

http://mashable.com/2015/03/02/apple-pay-scammers/

That was a flaw in the process the banks were using to allow cards in the Apple Pay (without verification), not a flaw in Apple Pay itself.

> That was a flaw in the process the banks were using to allow cards in the Apple Pay (without verification), not a flaw in Apple Pay itself.

Agree. However, this does illustrate a point that safety concerns are valid.

Myself, I'm a proponent of mobile payment but I understand the inherited hesitation from some folk about security.

Technically, I don't think they're doing a unique credit card # for every transaction, it's just per retailer.

Neither of those statements are true. Read up on payment network tokenization.