How Secure Are The Most Popular Mobile Payment Methods?
As technology gets increasingly more advanced, things become smaller and easier to access than ever before — including our shopping and spending habits. The switch from using physical cash first moved to payments through checks before onward to credit cards. Now weprocess payments entirely online with a series of numbers without ever taking a card out at all.
Unfortunately, convenience and the luxury of speed comes at a price in most areas of our lives, this one included. By handling our money through online means, we don’t necessarily face less security but instead, we inquire different problems than before. A hacker on the other side of the globe couldn’t take the money from the wallet in your back pocket, but now they could if the wallet is online.
What Are Mobile Payments?
Most of us have used some form of mobile or online payment in the past, whether for checking out at a grocery store or paying a bill. Still, not all of us know exactly how they work. The blanket definition is that mobile payments are payments occurring entirely through a mobile device, moving into categories by proximity or remote payments. A proximity payment happens through devices while everyone’s in the same place while remote payments occur in different areas completely.
A credit or debit card number you use online undergoes encryption to disguise the real numbers to third-parties while still completing the transaction with a special algorithm. Some bigger stores with mobile wallets use randomly generated tokens as a way for payments to hide from users with malicious intents. However, the chance of someone stealing your card information through mobile payments remains very low. Use of public Wi-Fi networks can increase this chance though.
Everything on Your Phone
While the risk of people stealing your information online is low, losing your phone with all of your information on it can give a potential thief a lot of information. Allowing them access to your phone, though unintentionally, can give them access to all of your card information and much more depending on what apps you use and how much you’ve written down about your contacts.
Thankfully, smartphone providers have seen this outcome on the horizon. Most smartphones have built-in protections to prevent a thief from using your information, like two-factor authentication or a PIN for added security. Many phones started to get in on biometrics like fingerprints for more security. Of course, the user has to utilize these features in the first place.
Mobile Wallet Problems
Earlier, we mentioned how potential hackers have better access to your mobile wallet if you use public Wi-Fi networks. The would-be hacker, once inside the network, can re-create a mobile wallet’s registration system and trick the user into handing over their card information. This is more of an awful bait than right out theft, which makes the issue even worse in the end.
To prevent this trick, put your cards on your mobile device or wallet while you’re at home using your personal or private network which has password protection. If you have no choice but to edit or manage your wallet while away from home, using a virtual private network or VPN from your phone may be your best option.
You’ve probably seen payment terminals in stores already or used a few. These machines using near field communication or NFC are on a rising trend. While you stand in the store, the mobile device and the NFC exchange small pieces of data to complete a purchase. The customer in question holds out their device over the NFC while the machine scans a chip to complete the purchase.
The mobile device uses a one-time code instead of a card number to complete the transaction, which is where the security comes in. Card information is never transferred or exposed to any network, so your information remains safely on your device without any third-party getting in the way.
The Benefits of Mobile Payments
There is something to be said for the convenience, after all. Whether customers shop in a store or complete a big project in the field, instant payments directly from a smartphone can save time on everyone’s part. Plus, allowing a customer to complete their transaction instantaneously allows for questions to come up and gives them peace of mind rather than getting surprised by a bill later on.
These days, people rarely carry cash since cards became safer to use, for the most part. People expect the capability to pay via a card in some form. If your business doesn’t accept cards, even if you’re simply hosting a stand at a local fair, then you will miss out on business. Having simple card readers or apps that allow customers to make payments allows for easy transactions.
Final Thoughts: Safe Payments
Remain aware of these risks and prepare for them in advance, whether that’s adding more security to your mobile device, keeping everything organized or remaining wary of where you shop. Keeping safe practices in mind can help save you a lot of trouble now and in the future. Check Math Formulas for Calculation Risk of online mobile payment.