Posts Tagged ‘mcommerce’

Mobile Payment Movement Leads to Concerns Over Security

Earlier this month, Starbucks bet big on mobile payment company Square, investing $25 million in the rapidly growing startup and adding its CEO Howard Shultz to Square’s Board of Directors. August also brought an announcement from Google that their mobile payment solution, Google Wallet, now works with any major credit card. These major changes indicate the rapidly growing mobile payment movement, an industry some experts predict to reach $74 billion dollars by 2015.

Google Wallet Mobile Payment

Google Wallet interacts with the Mastercard PayPass system.

But the convenience of mobile smartphone payments have many concerned over security issues with the new payment platform. Both technical and personal concerns have arisen, and the companies heavily invested in mobile commerce are making efforts to ensure consumers stick around.

Many personal concerns stem from a fear that easy payments mean easy money for criminals who get their hands on consumer smartphones. However, most mobile applications that process payments have built in features to make them possibly more secure than traditional credit cards.

First, most mobile commerce apps require a pin number to activate the NFC (near-field communicator) antennae. Coupled with pin-based locks screens on smartphones themselves, consumers often have two layers protecting their digital wallets. Also, stolen smartphones can be tracked with the built-in GPS capabilities and shut down remotely. While these features aren’t universally true of all mobile payment applications, major players like Google and Square lead the market with these security features.

From a technical standpoint, things get more interesting. With a new transactional platform, new methods of exploitation arise. Indeed, Square has already been hacked twice since 2011. However, it seems that these breaches in card security aren’t significantly different from fraud issues facing credit cards.

Some experts even feel that mobile payments are safer from exploitation than traditional 16-digit credit card accounts. Because credit cards have been in use so long, much more developed and sophisticated methods for cracking these accounts exist. Mobile payment systems may have the added security benefit of simply being new.

While valid concerns surround this new method of payment on the go, the security issues currently facing mobile payments seem manageable at this point. With the continued rapid growth in market share, it seems that the mobile payment movement will continue to march onward.

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