Mobile Wallets: Discussing the Security Issues

August 23, 2016 | By K. Joseph Breheny
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Mobile Wallets: An introduction
Today we depend a lot on the internet for financial transactions. The mobile wallet takes this a step forward; it is the digital or virtual equivalent of the physical wallet.
The mobile wallet is,in fact, a web-based platform that allows us to keep money and use the same for all kinds of transactions. The user can make payments just by signing in and unlike bank transactions, there are no charges for the transactions made via mobile wallet. There is no need of entering card details or PIN number either. This makes it very convenient.

Mobile Wallets: The Security Perspective
Notable questions that every mobile wallet should ask are- How secure is the mobile wallet? Do we need antivirus protection for mobile wallets as well? Would if affect our privacy in any way?

Yes, there are concerns that relate to security and privacy. That smartphones, which are used as mobile wallets, could get lost or stolen and thus financial data stored in them could fall into wrong hands is a possibility to reckon with. That mobile wallet, like all other technologies and gadgets, could lead one to financial vulnerabilities and even lead to identity theft kind of situations is a fact that’s to be taken into account. But at the same time, it has to be remembered that most mobile wallet providers are doing their share to make it all as secure as possible. User credentials are encrypted, tokenized and authenticated before transaction proceedings are allowed. The financial information between the bank and the application is transmitted via a token, which is in actuality an encryption. This token, which is used in place of the account number, allows only the application provider to understand the unique details of the transaction. Thus, the transaction is carried out in a very secure manner. The internet connection used, the GPS data and the many applications that would be there on a particular device gives it a unique profile, thereby making it easy to detect and determine the chances of fraudulent transactions.
But still, since no technology is 100 percent secure, it’s always good to be on the guard. There are things that mobile wallet providers could do and there are things that users could take care of, to ensure security and privacy.

What mobile wallet providers can do…
Mobile wallet providers can bring in security measures from their end. They could adopt steps to make sure that the full card number that is entered is not visible to the merchants/retailers at the name of purchase. If in case a device with the mobile wallet is misplaced or lost, the wallet provider can immediately block the wallet services and then revive it for being used in another device. They could also provide constant monitoring and offer good fraud-protection services. Zero liability protection, as per which the customer won’t be responsible for unauthorized transactions, can also be provided.

What customers can do…
Customers have to be careful too; they should take steps to ensure the safety of their wallets. Basic security measures like having a good antivirus on the device, not downloading or installing apps that don’t come from trusted sources, not clicking on suspicious links, not using public computers for shopping, having strong passwords which are frequently changed etc would be advisable. Having mobile security apps is good since they help in blocking malware and tracking lost devices.

Thus, if the security and privacy aspect is taken care of, mobile wallet would have a real bright future.


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