Technological advances and digitization of daily activities is an inevitable process of modern society. Everything changes in a blink of an eye, especially payment technologies. Physical cash transformed into bank cards, transactions became digital; processing takes only minutes to deliver money from one bank account to another. With the extensive adoption of smartphones and mobile technologies, digital wallet apps have stepped into the fintech spotlight.
However, various reports state that the increase of global smartphone adoption does not have a one to one impact on the adoption of digital mobile wallets, which in turn has a pronounced regional tinge, leading the way in Asia-Pacific region. The digital wallets technology gets better every day; however, the problem is that the consumers often are not using the technology in a proper way or do not fully understand the main advantages. Smartphone users are skeptical about mobile wallets usage due to the safety of payment transactions. Privacy concerns cannot be neglected because despite the undoubted convenience of digital mobile wallets they affect adoption rate and therefore affect the modernization process of the technology itself.
Is a digital mobile wallet secure?
Mobile wallets are often compared to physical wallets for one main reason: both perform basically the same function, which is the storage of payment means information like credit and debit cards, coupons and reward cards, tickets. Nevertheless, physical wallets are more unsafe than you might think. It is incredibly easy to lose or misplace a wallet, it can be simply forgotten at home or in the car. Smartphone, on the other hand, is always in the hand. The study shows that the average person checks her phone almost 110 times a day. Therefore, to forget or lose a smartphone is a lot harder.
Yet, the main security concerns are related to the financial data stored on the phone, in case the handset is misplaced. Сredit card and identity theft are at an all-time high now, the fear that using a smartphone as a mobile wallet might make it vulnerable to theft is indeed reasonable.
Magstripes on the card can be easily read with most of the magnetic scanners, which leaves the opportunity to thieves – hackers can intercept the transmittance of data when the card is swiped. Chipped bank cards are actually more secure, but there’s always an opportunity for hackers either way.
Most of these concerns, however, are groundless as mobile wallets are in most ways safer than bank cards. For example, Pri-Num’s Digital Enablement Platform enables secure payments, among other things, with the help of encryption and tokenization. The financial information is transmitted in a form of a token replacing customer’s account number. The token is an encryption method that allows for only the application provider to recognize the unique details of each transaction and execute the transaction instructions. Transactions through a digital mobile wallet are highly secure with additional measures and services available for users. In addition, specific measures ensure any transaction undertaken through mobile wallet is completely safe with no leakage of information.
Furthermore, in order to use mobile wallet app and access the stored information, customers will also need to provide a personal identification of some kind, such as a PIN, fingerprint, face or voice recognition.
Mobile wallet security measures
Most of the security measures that protect sensitive data are implemented by the digital mobile wallet app provider, processing and payment systems. First and most important is that the full card number is not visible to retailers and merchants at the time of a purchase, the data is protected and encrypted. The application itself must be secured from unauthorized use by the means, available on the smartphone.
Moreover, the mechanisms of disabling the mobile wallet services to prevent data leakage should be implemented, in case the device was lost or stolen. Additionally, the functionality that allows the customer to view transaction history and get an alert every time there is activity on their mobile wallet should be implemented as well. The monitoring and fraud protection techniques are often offered by the service providers.
Apart from the mobile wallet security measures enabled by wallet provider, consumers themselves should also consider security and privacy measures to ensure the safety of payment information. The app should be downloaded and installed from the trustworthy app market like Google Play or Apple App Store. When installing the app, users should always carefully read the messages and access requests.
Additional security is a must. Consumers should always consider two-factor authentication, including fingerprint if available and a passcode to lock the phone. For added protection, the passcode should be changed at regular intervals. Moreover, customers can request a confirmation and alert for any transactions over $30, for example.
Topics: digital, mobile wallet, security, tokenization