Are we ready for the mobile payment boom?
Although mobile payment technology has proven hugely popular in Asian and African countries, entrenched habits and outdated concerns have left Europe and the US falling behind. But that could all be about to change. A poll, conducted by ACI and Ovum, questioned more than 1,100 executives from the banking and retail sectors worldwide and found that 84% are investing, or planning to invest, in mobile payment technology. But just how prepared are we for the change?
The state of security
One of the advantages of banking and international money transfer apps is that your personal information is better protected. This is because of tokenization: a system that replaces sensitive financial and personal data with 'tokens', usually a string of nonsense letters and digits or a username and password, giving hackers less to steal. Tokenization is already used in banking apps like Paym and Zapp, as we explain in our guide to mobile payments, and the same principle is applied in e-wallets like PayPal.
Near field communications (NFC), known as contactless mobile payments, carry the same security protections as credit or debit cards. Every few transactions, you'll be asked to enter your PIN, and if you do fall victim to fraudsters, the bank you hold your account with will reimburse any money you've lost.
Room for improvement
An Experian survey found 50% of IT and payment system specialists thought mobile payments increase the risk of data theft, while a survey by TripWire in the US and UK found that just 1% of consumers thought mobile payment services were safe to use in-store. So how can payment services instil this missing trust?
The first step is to ensure that more payment tech adopts the basic security standard of tokenization. The ACI and Ovum survey found that 37% of the executives questioned have no plans to use it, and 22% hadn’t even heard of it.
The next step is to make the most of new identification methods to prove that you're really you, and that you are where you say you are. Tests involving facial recognition technology and fingerprint scans are leading the way. And if mobile payment innovators can use GPS data and payment profiles to replace weaker identification measures like sporadic PIN requests, mobile money transfer will be safe, secure and serviceable.
