Even before the coronavirus pandemic brought about a new boom in touchless payments, mobile payments were on rise worldwide. But if you use mobile payments, security is probably a concern for you. Let’s take a minute to look at how secure mobile payments are.
Why are mobile payments so great?
Businesses all over the world have greatly benefited from mobile payment capabilities, which have virtually made relationships stronger. In the last decade, we have seen a big shift to cashless payments made possible through online payment apps. Mobile payments have sped up transactions and changed the business operating environment, not to mention opening up unattended or automated commerce.
All of these things are made possible because of the level of confidence that users put into these portals, particularly in their security. According to tech giant www.docomodigital.com, by providing infrastructure services to network operators, financial service providers, regulatory commissions, and merchants (online and real-world) it has successfully provided a seamless mobile commerce environment for consumers. The backbone of their success relies on the security system placed in their services.
Tokenization is key
With mobile payments, an advanced token system ensures the safety of the consumers and their data. Tokens work by removing the personal data from payment cards that can be exploited in various areas of a person’s daily activities.
Such sensitive data is replaced with a token that is generated with a temporary period of validity while the real account number is stored in a safe digital vault. The token is useless outside the authorized process and becomes void when intercepted.
Android Pay and Apple Pay employ a near-field communication (NFC) system to send out the data. Both use tokens to authorize a transaction and they don’t work if the screen lock is disabled or unlocked. They also have a few offline tokens stored in the chip of the mobile for offline transactions while most of them come from the cloud.
Threats to mobile payments security
While the security level of this mode of payment is world-class, it is still not perfect and with the right (or wrong) conditions happening, it could spell vulnerability to the user mostly the consumers. Here are some things that should be considered with mobile payment security:
1. Lost phones
Because smartphones serve as your gateway to your online transactions, losing poses a problem to your privacy and data security. Most of the time it has complete access to bank accounts and credit card information that can be compromised in an event of a loss or theft. It is important that you enable all of its built-in security features to guard against unauthorized access.
2. Malware infection
The malware allows criminals not only to access your device but to also gain some degree of control over it. Although computers are more vulnerable than mobile devices, there is an imminent threat that can affect your mobile as well.
3. Bogus apps
Bogus apps are created to closely resemble an app that offers a secure payment option. These app clones trick customers into entering their banking details and use them for their fraudulent activities. It’s important that you don’t install nor enter personal information without verifying the legitimacy of the app.
A secure mobile future
It’s clear that mobile payments are a big part of the future of commerce. This is especially true now that Mastercard has mandated a contactless process for their transactions for this year. Whereas just a few years ago many people still didn’t trust mobile payments, today more of us don’t think twice about paying this way.
Mobile payments benefit not only consumers, but also merchants, as they promote sales and customer loyalty. And thankfully, now the mobile payments process has been simplified so it doesn’t require complex technical skills — though security is still there and stronger than ever. Going forward, all of this means inclusivity and security for everyone.
You can keep up with the latest news on mobile payments and money management security by bookmarking our mobile security news page here on MobileVillage, or our financial tech apps page.
