How Secure Are Mobile Transactions?
For many consumers, mobile transactions are now a way of life, choosing to replace their credit and debit cards with their phones. A recent report by BCC Research predicts that global mobile transactions will reach $665 billion by 2017. With so much business taking place over mobile devices, it broaches an important question: Just how secure are mobile transactions?
Mobile Transaction Concerns
Many mobile phone owners make regular transactions via services like Paypal, Square, and Dwolla, and a large base of mobile device owners bank through their phones and tablets. A recent survey conducted by the Federal Reserve found approximately 21 percent of mobile device owners used mobile banking in the past year. The study also found that nearly half of those surveyed that do not use mobile banking forgo the convenience due to security concerns. Concerns range from fear of malicious hackers stealing personal information, the possibility of losing a phone, and unwanted or accidental data interception.
These fears are not entirely unfounded; mobile transaction giant Square was the target of hackers in 2011, and Google Wallet was hacked twice in two days in 2012. Most mobile devices are largely unprotected against viruses, and where purchases are made using account information, cybercriminals are sure to follow.
Are They Safe?
Despite these fears, mobile transactions have become as ubiquitous as mobile Internet among smartphone users, but are they safe?
First, mobile phone code developers have learned from the personal computer industry’s history of security issues. Smartphone operating systems have only recently been developed, and so all the code was created recently. This means that there is less “legacy code,” or coding shortcuts used from older operating systems to support older features and programs – a prime tool of many hackers and the source of many Windows cyberattacks. Additionally, the software engineering community recognized the threat from the advent of mobile devices, and has developed many apps with this threat in mind. Downloading payment services from trusted application developers is always safer than downloading from unknown or third-party developers.
Second, mobile payments are often conducted on devices that possess feature such as GPS links, which means that if a payment provider notices an unusual transaction location that doesn’t sync with your day-to-day use, they are more likely to pinpoint an illegitimate transaction. Technology and design blog Hongkiat points out that many online transactions are protected by the Electronic Fund Transfer Act, but your personal liability for an illegitimate transaction often depends on how quickly you report the problem to the service provider.
Security is Shared Responsibility
In the end, many of the standard rules of smart online transactions apply to mobile transactions and in following them, you decrease your risk of cybercrime. Only download applications from trusted sources and protect everything, including your phone, with a password. Not only should your phone require a PIN password, but the passwords for any mobile transaction or mobile banking software should all be different.
Reconcile your purchases with your bank statements regularly, as you would with a credit card, to ensure that no questionable transactions are occurring. Use apps that issue an electronic receipt so you have something to reference when comparing statements, as well as something to check immediately following a transaction to ensure you have been charged the correct amount.
Finally, always report any security issues, payment problems, or bugs to the app provider and your bank as quickly as possible to guarantee that they know about the problem before it is too late. If you follow these rules, your personal mobile transactions should be safe and secure for years to come.