Mobile payments have increasingly more users every day. Consumers worldwide use their smartphones to pay for stuff because it is more convenient, faster, and hassle-free. However, not all businesses have implemented this option in their payment systems. In fact, some delay their use because they are skeptical of their security standards.
Mobile payments probably seem too good to be true to some business owners. For example, you can use the app of an online payment provider like Paxum to send funds internationally. This is something new to some merchants still unaware of the progress in cross-border money transfers.
This article looks closer at mobile payments and their security standards. Read on to discover how they can impact your business!
What are mobile payments?
When you hear “mobile payments,” you most probably think of paying for goods via your smartphone. That’s perfectly true. However, a mobile payment is any transaction you make via a mobile device.
Generally, this process implies using a payment provider via a mobile app. The merchant doesn’t necessarily need to have the same app if your purchase takes place online. However, when you use a mobile payment solution in a brick-and-mortar store, that business must have a POS terminal able to read the app you’re using.
How mobile payments work
You may know about mobile payments as contactless payments. Essentially, they are the same thing. When you pay for stuff via your smartphone, you don’t need to take out your wallet or handle bills or coins. Moreover, you don’t physically interact with money or the merchant.
Paying via a mobile device takes place through close-proximity radio frequency identification. This technology sends sensitive data from your app to the POS under encryption. In other words, hackers cannot intervene to steal that data mid-air.
Suppose you are looking to extend the security of mobile payments. In that case, you can look into solutions such as passcode or fingerprint payments. In these cases, you will need to go through an extra procedure to confirm your payment.
How secure are mobile payments?
Suppose you have a business and are considering implementing mobile payments in your system. In that case, it is only natural to be skeptical about their security. However, it’s worth noting that this technology wouldn’t have reached worldwide adoption if it hadn’t been safe for both consumers and businesses.
On the other hand, hackers and cybercriminals have evolved almost as fast in parallel with mobile payment technology. That’s how they have developed ways to breach data protocols, steal sensitive information, and defraud people.
Fortunately, the developments in mobile payment security are still one step ahead of the fraudsters. For example, the advent of two-factor authentication (2FA) has made online and mobile payments safer and more efficient. This method enables consumers to have two ways of confirming their payments. Generally, these include a combination of a password, the card PIN code, an in-app passcode, or a biometric detail, such as fingerprint, voice, or facial recognition.