How Secure Are Mobile Payments?

Cell phone paymentsWith the release of the iPhone 6, mobile payments have become a hot topic again.

Increasingly, people are foregoing credit cards and cash for payments made directly from their smartphone. While only about 12% of smartphone users made a mobile payment in 2011, that number is set to expand dramatically as more major players like PayPal and Apple sign up and make mobile payments a priority.

One important question stands out: how safe are mobile payments? Fortunately, mobile payments are a relatively safe alternative to carrying credit cards.

The Pros:

  • GPS and other data ensure that your payments are legitimate by allowing the payment provider to easily confirm the purchaser?s identity. This isn?t available with credit cards.
  • You are more likely to keep an eye on your phone than your credit card. Thus, it?s less likely that someone will carry your smartphone to a back room and steal your information.
  • Some apps don?t require you to store the credit card information directly on your phone, which means you are not vulnerable to this information being stolen off your person.

The Major Con:
Even with appropriate safety measures, hacking still happens. Prominent payment providers Square and Google Wallet have been hacked. And even though Apple?s mobile payment system was just introduced, it was announced following a hacking scandal involving their iCloud software.

The Solution:
As mobile payments expands, you may want to try it out. There are a few steps you can take to ensure the safety of your payment information.

  • Use a service that sends you an electronic receipt. Keeping track of your purchases is important if you have to prove one is legitimate.
  • Set a pin for your smartphone and possibly a separate password or pin for your payment app.
  • Report discrepancies right away.

As with any payment method, responsible spending and vigilance in tracking your account is key to maintaining the security of your financial information.