Technology has always aimed at easing the stress associated with making payments. First, there was the introduction of the coin that solved the issue of divisibility of money in the early days. Then came the introduction of technology that facilitated the printing of paper money. Subsequently, the chip technology used in credit cards, online banking, and mobile payments came into view.
The most recent form of payments which is facilitated by internet banking is fast making the use of credit cards obsolete. There are mobile wallets today like Apple Pay and Samsung Pay that completely eliminate the need for individuals to carry cash around.
Despite the massive advantages, mobile payments pose to businesses and consumers, a lot of people are concerned about the strength of security for mobile payments. There have been several instances of individuals receiving debit alerts for purchases they never made. Some experts have also hammered on the fact that mobile payments make consumers and financial institutions easier targets for fraud.
Why you Should be Aware
An Accenture study revealed that 21% of people avoided fixing their credit card details into their smartphones to make present or future payments. It was also found out that 19% of people were of the opinion that payment with their smartphones could put them at a bigger risk of being defrauded.
On the other hand, there are financial experts that feel mobile payments are the safest form of payments available. These experts mentioned the use of encryption to conceal credit card numbers during payment. According to them, payments with cash leave absolutely no trails and could make a report of a defective or non-delivered commodity difficult. Payments with credit cards and checks put one at risk of the numbers being copied and used for fraud.
The fact remains that all forms of payment methods are risky in their own ways. A person who carries cash around would be a good target for robbery. An individual who prefers using credit cards would be less prone to the physical robbery but a perfect target for fake credit card readers and chip readers that steal credit card data.
Every time a new method of payment is introduced, the public customarily asks questions about how secure the payment method is. The same questions are still being asked of mobile payments even after a decade-plus of introduction. The answer is that all forms of payments are susceptible to attacks. However, the key is to manage the risks associated with mobile payments in order to be free of breaches.
Dangers of mobile payments
There are several ways by which the security of your mobile payments can be compromised. The most common of these dangers are outlined and explained below.
Losing Your Smartphone
Nowadays, losing your smartphone is almost similar to losing your credit card. As small as your smartphone is, it holds a lot of sensitive data that could be used against you if it falls into the wrong hands. Your phone possesses the contact information of friends, acquaintances, relatives, and business clients. It also holds access to your social media accounts, images, and internet banking.
If you lose your smartphone at an eatery, airport, or any other public place, it would be easy for anybody to pick it up and utilize it as they see fit. A kind-hearted person might get possession of the phone and contact you or your relatives in some way to return the device. However, a malicious individual (and there are lots of them out there) would prefer destabilizing your life to returning your phone.
To make a quick assessment of the amount of financial risk associated with losing your mobile phone, you can ask yourself some questions. These questions include the number of smartphones you have, the security of the smartphones, your utilization of password managers, and the linking of your smartphone to your internet banking accounts.
Malware used to be highly targeted at computers because they were popularly used for making mobile payments. With the increase in mobile wallet usage since the beginning of the 2010s, malware has been more concentrated on smartphones. This trend is also observed to be increasing.
A device that has been infected with malware can be remotely controlled by a cyber-criminal. In several cases, malware is used to steal private data, social media passwords, and online banking details. Many individuals do not even have knowledge of recognizing a malware infection.
The most common way of getting infected by malware arises from clicking suspicious links sent to your email. If the link is clicked and any program from the website is downloaded and installed, the device would become infected with the malware. The malware could also come in the form of an email attachment.
Online Spying During Public Wi-Fi Sessions
One of the major ways mobile payment methods can be compromised is by getting spied on online by cyber-criminals when you’re using public Wi-Fi. When you connect to public Wi-Fi, anyone else connected to the same network can spy on your online activity. Some individuals even believe the myth that public Wi-Fi that requires a password before connecting is secure. The hacker could just as easily connect to the Wi-Fi network as you did and spy on your activity.
If you make a payment online or conduct any financial action during the public Wi-Fi session, it gets worse. The hacker would be able to get your card details while observing your online activity. Typically, when card details are added to a mobile wallet, the session is protected with encryption and is concealed with a code. In fact, merchants are not able to get your card details when you buy products or pay for services online because of randomly generated payment tokens by mobile wallet providers.
However, using unsecure free Wi-Fi would increase the risk of your credit card details being spied on. In some cases, the cyber-criminal could even create his/her own network and make it seem like it is a public Wi-Fi network. Once you’re connected to the network, the hacker would gain unrestricted access to your online activity and could even get your files.
Securing payments on your devices
Despite the risks associated with mobile payments on your smartphone getting compromised, you can take some steps to strengthen security. Adhering to these steps would make certain you enjoy the benefits of mobile payments without being constantly worried about breaches of privacy. These tips are outlined below.
Utilize a VPN
A proven method to best secure your financial information is with a secure VPN, also known as Virtual Private Network. A VPN encrypts the online traffic flowing between your device and the network to which you’re connected to. Basically, it means a virtual private network performs the role of an intermediary between your smartphone network and your internet service provider (ISP) or public Wi-Fi.
Even if you make several purchases on your smartphone or insert card details into your mobile wallet while using a Wi-Fi network a hacker is connected to, the cyber-criminal would be unable to understand the online activity on your device. Your online traffic would show up as a mixture of symbols, numbers, and alphabets to the cyber-criminal, making certain your data would be indecipherable to the malicious individual.
There are two types of VPNs. Free VPNs can be used by anyone and offer limited advantages. Paid VPNs on the other hand, offer a wider range of features for its customers. Some paid VPNs would, however, allow you to enjoy a few days of the free trial before you make the choice to go premium.
Properly lock your smartphone
A lot of smartphones nowadays now come with better forms of protection to restrict unwanted access. The most proficient way to keep malicious individuals from accessing your phone is to properly lock it. You can use two-factor authentication; which is using a PIN combined with a fingerprint or iris unlock.
If you feel uncomfortable using the traditional lock system for your smartphone, you can take certain measures when your device gets lost or stolen. You can either wipe all your data remotely using a computer or switch on password authentication remotely.
Protect yourself against malware
To prevent your devices from being infected by malware, the best measure is to make use of an antivirus. This way, if any malware manages to get on your device, the antivirus alerts you and blocks the malware. You can also upgrade all your applications as older versions might be prone to cyber-attacks. Finally, if you run a business, you can organize training for your employees to educate them on how to prevent phishing and malware through email attachments.
Every payment method comes with its own form of risk. Carrying cash increases the risk of getting robbed, using credit cards increases the risk of the chip information being stolen, and mobile payments increase the risk of a smartphone being breached. The most common ways one’s financial information can be breached include losing one’s phone, using public Wi-Fi without VPN, and getting infected with malware.
To prevent these possible mobile payment hacks, you can improve security on your smartphone, make use of a VPN, and install an antivirus on your devices.
Brad Smith is a technology expert at TurnOnVPN, a non-profit promoting a safe, secure, and censor-free internet. He writes about his dream for free internet and unravels the horror behind big techs.
#TurnOnVPN is a non-profit organization focusing on a free and unimpeded internet for all. We take part in numerous online events, aimed at promoting a safe, secure, and censor-free Internet. Learn more at www.turnonvpn.org/blog/.