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Security benefits of mobile payment methods


Much has been said about the various payment options that will soon become commonplace on Smartphones, and so it is important to educate consumers on safe practices and raise awareness of the increasing appeal of mobile devices to thieves. However, with the right security measures the humble handheld is actually quite capable of offering more security than conventional payment methods.


Cindy Merritt, assistant director of the Retail Payments Risk Forum recently cited the benefits of mobiles when being used for transactions – both in terms of upcoming technology such as NFC and in using such a device to carry out bank transfers and online transactions.


“First of all, the security functionalities resident in the mobile handset provide authentication capabilities that don't exist in the current payments environment” says Merritt. “The ability to add passwords and GPS location functionality to the handset represents additional security controls to accessing payment instruments in the future mobile wallet. Today, there are no locks on your leather wallet to preclude a bad actor from stealing your credit and debit cards and using them for illicit activity.”


Alternative payment systems were also referenced, such as those that work via SMS, that are already in place in emerging markets where utilising this service is seen as safer than carrying cash, or more convenient where ATM machines and banks are less widespread.


And it’s not as though more conventional forms of payment, such as cash and credit cards, are foolproof. “The technologies that enable our current payments are becoming increasingly obsolete and vulnerable to fraud. Card payments grow riskier every day as the United States remains reliant upon mag-stripe technology, which is very easy for criminals to breach and then use to clone cards for illegal payments. Because mobile devices will use contactless technology in the form of an embedded computer chip, the mobile phone will be a much more secure payment device than the plastic cards we use today” continues Merritt.


With this in mind it certainly seems as though Smartphones offer opportunities that spread further than simple convenience when it comes to managing money. Of course for any such systems to get off the ground, providers will have to carry out stringent security checks to ensure that these forms of payment are as secure as possible. The onus will also be on the consumer to take advantage of the potential benefits of phones by ensuring that sufficient security – both in terms of keylocks, PIN entry and suitable software to safeguard against malware and help retrieve a phone, is in place.

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