What the Samsung Pay hack means for going cashless

The cashless revolution means you’ve got increasingly less reason to carry your cards, let alone a wad of notes in your wallet. But after a Samsung-owned contactless payment firm was hacked earlier this year, some are beginning to question how safe this increasingly widespread (and convenient) technology actually is.

The hack

Samsung bought LoopPay, an American company specialising in mobile payment systems, for $250m in February. The move was widely interpreted as an attempt to compete with Apple’s popular Apple Pay application.

However, within weeks LoopPay had been hit by a sophisticated cyber-attack. The hackers, thought to be from a group affiliated to the Chinese government, seem to have been looking for details of the company’s Magnetic Secure Transmission (MST) technology. Unlike the tech used by competitors Apple Pay and Android Pay, MST can be used with up to 90% of card readers used by US retailers. Samsung’s own cashless application, Samsung Pay, does use MST.

When news of the hack was finally made public earlier this month, it raised fears that the personal details of Samsung customers might be at risk. Samsung quickly moved to reassure its customers: “Samsung Pay was not impacted and at no point was any personal payment information at risk,” said Darlene Cedres, the company’s Chief Privacy Officer.

The consequences

However, even if customer data wasn’t put at risk by the attack, the story has exposed the underlying uncertainty many of us feel about the safety of cashless payment technology. A survey of both US and UK consumers conducted by TripWire found that only 1% of shoppers thought in-store mobile payment services were safe.

As convenient as it is, there’s little doubt that the cashless revolution opens up new concerns around privacy. That's why it's vital that innovations in mobile and online security keep pace with developments in payment technology.

The good news is that companies around the world are wising up to the potential risks of cashless, and coming up with ever-more ingenious ways to protect you and your money. Norweigian tech company Zwipe has developed a system that requires the user’s fingerprints to authorise money transfers, for example. In future, expect technology that lets you use your voice or the unique patterns in your eye to do the same.

We'll be keeping you updated on all the latest advances in payment technology and security, so you're clued up on the safe options available to you. Stay up to date with The Money Cloud blog.

Comparison tool

Alex Larsen

I've been struggling to find a way to make regular transfers to my Norwegian account from the UK (where I work). Finally I've at least got some pointers for where to start, so I won't have to pay a fortune every time I transfer!

Felicity Liebmann

Used your service last week to get travel money from ICE and it all worked beautifully. Very efficient and easy, the cash arrived when it was due so there was no hanging about waiting or anxiety about it not arriving when promised.
uae

International Money Transfers for Individuals

If you are purchasing overseas property, paying tuition fees, receiving your pensions or for whatever reason, transferring money internationally can be a costly. We compare the services on offer for the amount you wish to send and save you money by finding the best exchange rates and lowest fees.

Paying for overseas holidays

PAYING FOR YOUR OVERSEAS HOLIDAYS IN LOCAL CURRENCY

When paying for your dream holiday in the local currency of your destination country, you want to make the most of superior exchange rates and low fees offered by the foreign exchange brokers listed on our site. This will ensure that you save money and your funds are protected.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter