Credit Cards

Is Mobile Wallet Technology Secure?

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While many consumers have embraced mobile banking and been generally pleased with their experience, data also shows that some consumers still are reluctant to adopt new payment technology that could make their shopping experiences online and in the real world more convenient.

Experts have often cited consumer fears over the security of mobile wallet systems as the largest hurdle to widespread adoption of the technology, ahead of even the fact that the technology required to complete such a transaction is not widely available, according to U.S. News and World Report. As a consequence, the companies developing these mobile purchasing platforms will likely need to do a bit of work to reassure consumers that their systems are secure.

However, others say that most consumers only trust traditional payments more than mobile ones because they’re more accustomed to them, and there will naturally be resistance to change, the report said. Nonetheless, traditional credit card purchases are often viewed by experts as being fairly unsecure.

“It makes no sense to make the argument that because the 16-digit account number has been around longer that it’s better,” Ben Milne, CEO and co-founder of mobile payment provider Dwolla, told the news magazine. “In any event, probably what it means is the system has more problems. To me, if anything, it has probably more known ways of being exploited because it’s been around for so long.”

In fact, mobile payments are likely far more secure than traditional credit card swipes even in its infancy, the report said. The way data is encrypted on these systems makes it far more difficult to crack than the technology on the back of all credit cards, which has been around since the 1950s.

However, experts also say that consumers concerned about the security of their mobile wallet systems can add some protections on their end as well, such as password- or keycode-protecting their phone, and choosing payment verification methods that require two types of information to validate a transaction, the report said.

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Mobile wallet technology will likely be adopted on a widespread basis within the next few years, as most analysts say it’s a matter of if, not when, consumers will accept the payment method as being legitimate and convenient. Some have projected that the industry could be worth tens of billions annually by just 2015.

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  • http://www.attochron.com Tom Chaffee

    I think it interesting that the momentum of the credit card model is pushing — what seems to me — the most obvious model out of the way in the world of mobile-based purchases. Credit cards, as a third party, by nature open a ‘back door’ to liabilities(credit card fraud online) that don’t exist in a more ‘inherent’ form of banking that already exists with your phone.

    You pay your bill every month and you get (ever more increasingly) an exact and limited amount of network ‘time’ — what scientists would call a time/bandwidth product. Did you know that the time/bandwidth product (what some call ‘capacity’) — and the very capacity you are using — is actually traded on world financial markets as a commodity ‘Ethernet trading’?.

    Ma Bell, or Ma Bank? More often people are pre-paying their phone service. Now the telco has money on deposit..sounds like there’s already a ‘bank’ there. If this pre-existing ‘financial clearinghouse’ (using network time/bandwidth product as ‘coin of the realm’) — is used for every transaction (that you use your credit card online for), then the only security issue would be the telco’s records themselves.

    Telco records could be protected at the data center en masse and transactions corroborated via the telco bill you already get — much more easily than 10 billion credit card numbers floating in the ether with a ‘back door’ created every time you use them.

    • tom

      Can you provide more information on Ethernet trading? i was not able to find any information through a google search.

  • http://www.walletdomains.com Stuart Hollington

    Mobile Wallet is the way forward, everyone carries their Mobile with them everywhere and it makes perfect sense.

    Cheers

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