Mobile Payment Security: New Field, Fresh Challenges
The future of mobile payments could be a big deal, especially for event professionals. But mobile payment security is still a work in progress.
The mobile payments space is bursting at the seams, but that could introduce a new set of security issues.
With companies such as Square, Google, and PayPal building this space, it’ll be a matter of time before payment services via mobile devices become a fact of life.
Multiple analysts estimate that the industry could grow to more than $600 billion by 2016.
But according to a recent piece by Bloomberg Businessweek, mobile payment security issues may become significant. Among the pressure points:
- User security: More than two-thirds of mobile users don’t secure their phones with passwords, which could lead to security problems if phones are stolen. Security issues could become more painful for users at a time when providers are under pressure to boost easy of use.
- Accessory faults: Square, a leading provider in the space, had a problem with an earlier version of its card-swiper: It accepted payments using stolen merchant accounts and credit card numbers. Newer devices have been updated to add encryption.
- Malware issues: Malware is becoming increasingly common on smartphones. More than 15 percent of all malware attacks worldwide now take place on smartphones, according to a 2012 report by research firm NQ Mobile, and these attacks jumped by 18 percent since 2011. It’s not inconceivable that these issues will manifest themselves in the mobile payments space.
- Who to turn to? Consumers Union staff attorney Suzanne Martindale says consumers may find it difficult to figure out where to go in the case of a security breach. “Depending on how you paid for the thing, it might not be clear who’s holding the responsibility,” she said. “In many cases, unfortunately, it’s the consumer left holding the bag, because they get frustrated with the runaround.”
Mobile services are working on the problem. PayPal, for example, has worked on a number of verification tools to properly identify the purchaser. And Isis, a mobile payment venture created by Verizon, AT&T, and T-Mobile, also will have built-in controls to deal with attempted theft.
Have you tried mobile payments for one of your events? If so, what issues have you run into?
(courtesy of Square)