When it comes to the evolution of the payment industry, some of the biggest movements weren’t even happening until two or three years ago. The business world is changing on a daily basis and the simple notion of purchasing something is no different.
Every day, we’re trying to find new ways to meet the needs of consumers, whether that be making payments faster, more convenient or more unique to the customer. The future of digital payments looks promising, but consumers also come with their reservations.
In today’s cyber security challenged world, it’s difficult to completely trust mobile apps, especially payment apps. And with good reason. Reports of security breaches are incredibly common. But what about carrying your credit cards and cash in a wallet, is that really safe? Today we’re looking at the security surrounding mobile payment apps and what they mean to you.
The Details of How Mobile Wallets Work
If you have a mobile or smartphone, then you have a mobile wallet. A few examples are Apple Pay, Android Pay and Samsung Pay. Even PayPal, Chase, and a few other payment providers offer their own form of a digital wallet.
These ‘digital wallets’ work by storing your payment information. When you want to purchase a cup of coffee or a lawn mower, all you have to do is hold your phone up to the register or make a payment on your phone.
Payment apps not only store credit card information, but they also store rewards information, loyalty cards, concert tickets, plane tickets and much more.
They encrypt your information on your smartphone, then NFC tech communicates with a point-of-sale system to relay information from the device to the mobile wallet organization. Next, your information is decrypted, isolates the correct account, and identifies the information. Once your payment is authorized it accepts the transaction notifying the POS that it’s complete.
The good news here is that your information is never vulnerable to third-party systems.
Smartphone Wallet Security vs Traditional Wallets
Smartphone wallets come with the following technology to keep your information secure:
- Near-field Communication Chips
- Mobile Sandboxing Architecture
- Two-Factor Authentication
- Remote Shutdown
Traditional wallets obviously offer no protection whatsoever. If they are lost or stolen the only thing you can do is cancel your credit and bank cards as quickly as possible. The aforementioned wallet technology protects you from encryption from outside sources.
Risk Factors with Mobile Payments
Mobile payments are exposed to hackers for a few reasons, the first being that no system is completely safe from hackers. Every system has its vulnerabilities, so even if you choose a high-end product or service, you still run the risk of being exposed.
Public Wi-Fi is another luxury that exposes users to cyber-attacks since hackers have an increased level of accessibility to your unsecured information. It is suggested that mobile users consider using VPN and SSL connections to protect personal information.
When you aren’t using your Wi-Fi, Bluetooth or sharing, these components should all be turned off as an added precaution.
How to Maintain Safety with a Mobile Payment App
Technically speaking, mobile payment options could be considered safer than traditional payment options simply because they do not require your card number or expiration date.
It’s also good to know that there are a few things you can do personally to decrease your chances of having security issues with your mobile payments.
Set a Strong Password
There are a range of security options to choose from with your phone, and depending on the kind that you have, you can choose from multi-digit number codes, fingerprint reading or even facial recognition.
You might even be able to decide if your mobile payment app will require additional passwords to access and use them. Keep in mind to create very unique passwords and to change them as frequently as you can without forgetting them.
Despite the obvious flaws of most of our payment options, we continue to rely on their convenience to suit our unique and busy lifestyles. Although mobile payments are not 100% safe from hackers, taking the time to update your security options and create distinctive passwords is a good place to start.
Work with a mobile payment app that you can trust, such as Apple Pay, Google Wallet or Samsung Pay, which are three well-known companies in the mobile field. These options are also ideal since you can call in or physically speak to a representative about their mobile wallet options.
Consider making the move to a smartphone wallet if you want easier, and more secure, access to your funds.