Mobile payments include mobile money transfers and mobile wallets.
Such transactions are regulated, and they occur digitally by using a
mobile device. There exist a diverse range of mobile payments, such
as in-app mobile payments, mobile browser payments, wireless credit
card payments, and contactless payments or digital wallets (What are
mobile payments? and how to use them. Square, 2021). Mobile
payments transactions have monetary value, and they are conducted
via a mobile telecommunications network (Raina, 2015).
The rapid technological advancement coupled with the invention of
smartphones has given rise to the concept of mobile payments.
Currently, a major section of the population uses a smartphone, and
these devices have made it easier to engage in financial transactions
without relying on physical cash. A wide range of technologies is
used in mobile payment systems, such as short message services
(SMS), near field communication (NFC), quick response (QR) codes,
and magnetic security transmission (MST) payments (Sachova et al.,
2016). While using the NFC method, which is a component of Radio
Frequency Identification (RFID), considerable information and data is
captured. So, it is imperative for mobile payment businesses to
safeguard the confidential information of their customers.
Mobile payments offer significant relief to customers and companies.
The stores that use this payment method need to integrate specialty
hardware along with mobile wallets. Initially, a wallet like Goggle Pay
or Apple Pay has to be installed. An appropriate payment processor
must be used by the shop. The customers must hold their
smartphones to the specific contactless payment terminal so that the
devices can communicate. It enables the passage of encrypted
payment details to finish the transaction. The funds get transferred
from the customer’s digital wallet to the point of sale of a business.
In mobile payments, tokenization is another interesting component.
When a mobile wallet is set by a customer, details are set to the
issuing bank, which replaces it with a token, i.e., a series of random
numbers. It protects customers by encrypting their account details
(Liu et al., 2020).
The five privacy and security issues that may arise in the context of
mobile payments include:
Theft or loss of device –
Users input sensitive information into their device while installing a
mobile wallet. So, in case they lose their device, their sensitive and
confidential information that is used for mobile payments is also at
risk.
Risk relating to cybercrimes –
Cybercriminals can team account details of customers. The risk
increases when new cards are added to the mobile wallet while using
an unsecured public Wifi network.
Malware in the smartphone –
Malware may be used by online hackers or cybercriminals to
remotely manipulate smartphones, computers, and other electronic
devices to steal confidential and sensitive user information. Thus,
they could steal a legitimate user’s password and other private
details. Such a risk arises when users click on a suspicious link
without realizing that it is a trap by hackers.
Use of weak and ineffective passwords –
The use of general or weak passwords can intensify the risks relating
to mobile payments.
Risk of phishing scams –
The risk of phishing scams has magnified due to the emergence of
mobile payments systems.
Since technology is constantly evolving, individuals must try to
securely use smartphones, especially while engaging in mobile
payments.
References
Liu, W., Wang, X., & Peng, W. (2020). State of the art: secure mobile
payment.
IEEE Access
,
8
, 13898-13914.
Raina, V. K. (2015). Overview of mobile payment: technologies and
security. In
Banking, Finance, and Accounting: Concepts,
Methodologies, Tools, and Applications
(pp. 180-217). IGI Global.
Sachova, R., Marcos, M. M., & Revetti, S. H. (2016). Security of
Mobile Payments and Digital Wallets.
European Union Agency for
Network and Information Security
.
What are mobile payments? and how to use them
. Square. (2021).
Retrieved April 30, 2022, from
https://squareup.com/us/en/townsquare/mobile-payments
