How Secure are Mobile Transactions?
More consumers are paying for purchases through mobile devices: smartphones, the Apple Watch, the Square, and other tools that make payments easier and faster.
But how secure are these mobile transactions? Are they better or worse than online buying? These are issues smart consumers need to think about before they wave their phones or watches at a scanner.
Mobile Payment Technologies Happened Too Soon
Many organizations are not ready to handle mobile payments. In April 2015, the Ponemon Institute conducted a study on data security in “evolving payment systems” for Experian’s Data Breach Resolution unit. Ponemon surveyed more than 23,000 workers involved in IT, IT security, risk management, product development and others in the mobile payment industry. About 70 percent were supervisors or held higher-ranking positions.
The findings strongly indicate companies were prepared for mobile payments:
- 68 percent of the respondents said pressure to migrate to a new payment system puts the security for customer transactions at risk.
- 50 percent were not optimistic about the effectiveness of security in emerging payment systems.
- Almost one-quarter identified mobile payments as the greatest security risk, slightly lower (by 1 percent) than point of sale sites but quite a bit lower than online sales, which 34 percent felt were the greatest risks.
Moreover, respondents came from organizations that averaged three data breaches over the previous 24 months.
It’s also worth noting that in October 2014, The Integer Group reported that 35 percent of online shoppers make purchases straight from their smartphones. It seems that the demand for customer purchasing convenience may have overwhelmed IT professionals’ desire to beta-test and have more data that points to strong security.
Protect Yourself From Mobile Security Breaches
How can you protect yourself from a security breach that comes through your mobile device?
First, educate yourself. Learn the steps to increase safeguards for your personal security, such checking electronic devices — baby monitors, toys and “smart home” systems — for possible security bugs. Basically, anything wireless is a potential door for online theft.
You can disengage from mobile altogether and just use your device as a phone. But this isn’t realistic for most people; our mobile devices (especially smartphones) are common, everyday tools. Moreover, Pew reports 15 percent of Americans only get on the Internet via a smartphone and close to another 20 percent rely on their phones for this purpose at least some of the time.
You can pay with cash and never through your phone. This means carrying cash, which is easy to lose. ATMs are also vulnerable to security breaches. And many merchants who aren’t brick-and-mortar, like those who work at farmers markets and art shows, prefer taking mobile payments so that they aren’t in danger of losing cash or receipts.
The easiest solution for consumers is to get an identity theft protection package that alert them when they identify something out of order connected to personal information, such as unusual credit card purchases or use of social security numbers.
Look for Tools That Protect Mobile Access
If you must purchases through your phone, consider a third-party processor with more security in place. ApplePay uses tokenization, which does not reveal credit card numbers to merchants. It’s more secure than credit card PINs or security chips.
Even if you decide to halt smartphone payments, don’t despair. A group of banks and tech firms are determined to use biometric authentication: iris scans, fingerprints, voice and facial recognition — and replace passwords and other old technology in the near future, Mobile Payments Todayreports.