Mobile technologies are revolutionizing the way the world shops, as well as how they pay for their purchases.
In less than two decades, smartphones and wearables have forever transformed the commercial ecosystem, including the ways payments are made, as well as their safety from digital criminals.
Mobile payments defined.
Mobile payments are secure transactions that occur using an Apple or Android phone, or a wearable device such as a smartwatch or fitness tracker. They are made possible thanks to NFC technology and can also happen via apps.
In the recent past, purchases were generally made with cash, checks, or credit cards. They required that a shopper have money, a check, or a physical credit card available to facilitate the purchase.
Since today’s mobile payments take place with devices such as tablets, phones, or wearables, they do not require a customer to have anything else in hand. These devices use near-field communication (NFC) to facilitate Tap to Pay on iPhone or Android.
After inputting payment details into a digital wallet app on the phone, buyers simply unlock their device, place it near the merchant’s reader, and wait approximately two seconds for the payment to be authenticated, authorized, and completed.
Mobile payments can take various forms. They can occur via the digital wallets described above or can happen contactless for in-person customers.
In supported apps and on websites, users simply select their preferred method, authorize the payment, and complete the transaction without needing to enter all of their details every time.
Benefits of mobile payments.
Mobile payments bring numerous advantages to buyers and sellers. These include convenience, speed, efficiency, security, added payment options, boosted sales, and boosted insights.
Mobile payments have transformed the commercial universe for the better. Because they are wireless, they can take place anywhere, and they happen in an instant.
Each time a mobile purchase is initiated, the data is changed into a random series of digits. This tokenization process renders it useless to hackers and allows you to increase security.
Moreover, mobile devices can accept a wide variety of payment types including debit and credit cards, digital wallets, and even bank accounts. This flexibility has brought added sales to merchants, who can now also tap into a rich set of analytics that enable them to make more accurate sales forecasts and marketing decisions.
A word about mobile payments and security.
Although tokenization helps to protect data at the point of sale, mobile payment security concerns remain. They focus on data breaches, malware, unauthorized access, and fraudulent apps. Solutions involve encryption, tokenization, and secure coding protocols.
On the surface, it seems that the tokenization and encryption that happens to customer data when the purchase is initiated and before it even reaches the merchant service provider should be enough to protect these sensitive details. However, there remain serious threats to the security of mobile transactions that experts are working to overcome.
The headlines remain stubbornly full of stories about various major data breaches affecting the sensitive details of millions of consumers each year. Constantly evolving types of malware continue to be inserted into apps and network systems, compromising the viability of mobile payments.
Via phishing and social engineering schemes, bad actors continue to gain access to fixed and mobile systems, interfering with the integrity and confidentiality of data. Fraudulent apps also entice consumers to provide details that are then used in illegal ways.
There are several best practices that can prove to be very effective in combatting these concerns. Businesses should start by educating both staff and customers on mobile security.
This should include staff instruction on relevant policies, as well as consumer outreach containing data protection tips.
Next, it is crucial that businesses choose a merchant service provider who has demonstrated a commitment to security protocols. They should be able to show their compliance with pre-established requirements such as the Payment Card Industry Data Security Standard (PCI DSS).
Companies should set up a mobile payment system with security at the center. This requires not only strong authentication procedures but also secure network connections between their ecommerce platforms and their payment providers.
Finally, organizations should invest in real-time mobile payment transaction monitoring. This helps to detect, track, and react to potentially fraudulent activity, often before the transaction goes through.
Although the payment security landscape remains challenging, the future appears bright for mobile payments. They are convenient, accessible, highly portable, and relatively safe.
With added attention to security for both smartphone vendors and end users, many of the issues that are causing data safety concerns today could be significantly reduced in the near future.
