The money you have to spend is no longer just the cash in your pocket. As the digitalization of finances grows, many organizations are creating solutions to allow people to pay for goods in a variety of new and exciting ways. Perhaps the most relevant of these are mobile payment systems such as Apple Pay or Google Wallet.
These services allow the user to exchange money with a vendor simply by accessing an app on their smartphone. While this has revolutionized how many people view their money, it’s also raised security concerns. To that end, let’s dive into the safety of mobile payment systems and what the average person can do to secure their financial data.
The systems themselves are secure …
To begin, it’s important to note that mobile payment solutions are incredibly secure in and of themselves. The reason for this has to do with the combination of encryption and tokenization.
For those who don’t know, encryption is a security technique that takes a piece of data, scrambles all of the information within and will only allow a computer or person with the right decryption key to be able to read it in plain text. This is important for mobile payments because it allows financial institutions to send banking information through your smartphone to the vendor without hackers being able to intercept it.
However, that’s not the only reason these services are seen as safe. Mobile payment solutions also rely upon tokenization, which is where your financial institution uses unique credentials for each transaction. Rather than sending your entire credit card number, the system basically generates a new one every time you spend money.
Therefore, any hacker monitoring your data traffic will only gain access to banking information that’s already expired. On top of that, The Next Web contributor Naomi Lurie reported modern mobile payments move infinitely faster than previous solutions, making them incredibly convenient.
… but the users often aren’t
Of course, no system is unbreakable, and it would seem most mobile payment solutions have a weak spot in the form of social engineering. The Economist stated that most providers generally match up your phone’s GPS data with known banking information.
“The security of your information is going to rely on your ability to keep it secret.”
So, if your main bank is in Indianapolis but a hacker tries to set up an Apple Pay account in Mexico City, the person creating the account is going to get a call. However, the Apple representative is only going to be able to ask questions of the person to verify their identity. If you have a lot of your personally identifiable information posted on the internet, a hacker might be able to pass this test.
How can you prepare yourself?
As always, the security of your information is going to rely on your ability to keep it secret. Posting on Facebook is fine, but telling the world your mother’s maiden name and where you were born is probably too much information. A simple way to protect yourself from a hack is to simply keep some personal data to yourself.