Last Updated: Jul 23, 2015
Using your phone to make purchases? Whether you’re placing an order with an online store or making an Apple Pay payment at a local merchant, you need to follow a few guidelines to make sure your financial data stays secure.
Consumer technology is supposed to make things easier. Credit cards are the payment method of choice for so many because they’re fast, easy, and safer than carrying cash. Arguably the biggest advance in the technology of payments is mobile payments with a smartphone.
Due to its marketing budget, the best-known mobile payment method is Apple Pay but despite the company’s status as a household name, it’s technology is relatively new and unproven compared to more established players in the field like PayPal and Square.
Technology allowing you to pay using only your smartphone is very new and because of that, cybersecurity is a concern for both consumers and the business owners accepting these mobile payments. But most experts advise not to worry.
Mobile payments use NFC or near field communications. It’s kind of like Bluetooth but the differences make NFC more appropriate for mobile payments. Bluetooth signals have a range of about 30 feet while NFC is limited to about 4 centimeters. Because of the short range, the signal is more secure. If a hacker wanted to intercept your data during the transmission from your phone to the payment terminal, they would have to position a device within 4 centimeters of your device.
Second, Bluetooth technology takes longer to connect the two devices and uses more battery power.
The newest mobile payment technologies have multiple levels of encryption. Apple Pay, for example, doesn’t transmit your credit card information. Instead, the credit card processor receives a special number that is valid for only one transaction.
How to Stay Safe
No technology is absolutely safe and regardless of how secure, it’s only as secure as the person using it. Most security concerns come from older but still popular mobile payment gateways like PayPal and Square. Here are a few ways to stay safe:
1. Don’t use public Wi-Fi- If you’re entering credit card information on your phone, either through manually typing the numbers or swiping the card. You never know who is on these networks and the chances of somebody getting your financial information is higher.
2. Don’t store passwords on your phone- Rest assured, as soon as somebody figures out a better way to authenticate your information, passwords will be a thing of the past. They’re already inconvenient but to combat that problem consumers often do everything they can to make them assessable and trouble-free.
But the more convenient you make it for yourself, the easier you make it for a cyber thief to get their hands on your information. Don’t store your passwords on your phone unless they’re encrypted.
3. Strong passwords- Along the same lines, your password should have no link to you personally. Don’t use your birthday, your son or daughter’s name, your street, or anything else linked to you. That information is publically available and hackers know where to find it.
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4. Use a Password on Your Phone- If you’re using your phone to do financial transactions, you must have a password—not the month and year of your birthday either.
5. Stay mainstream- Only use apps from official company app stores and well-known companies. Unless you’re an IT expert that understands the under-the-hood details of cell phones, stay away from jail breaking your phone or any app that relies on a jail broken phone.
6. Have a device locator running on your phone- There are apps for all phones that allow you to track the location of your phone if it’s lost or stolen. Make sure it’s turned on and correctly configured.
7. Don’t link to your mobile device to your debit cards- Let’s say somebody gets a hold of your phone and uses it to make payments. If you have the security features of your phone activated, that will be difficult but if it happens, you will immediately dispute the charges because you’re monitoring your bank and credit card accounts with an app of some sort. (hint)
If it happens, you don’t want the thief emptying your bank account. That would mean you have no money until the problem is resolved. That’s why you don’t use your debit card. Use a credit card. At least the only thing you lose is access to your credit card for a brief period.
8. Examine the payment terminal- You don’t have to be a mobile payment expert. If the machine looks tampered with or there are any other items around it, don’t use it. Devices the size of strawberries have been created in labs that can steal data transmitted through NFC but to date, no real reports have surfaced.
What is real are devices being attached to gas pump readers as well as terminals in other stores that can steal your information.
Hackers will follow the money. Mobile payments are expected to reach $35 billion annually by 2017. Using technology to move around that amount of money is a hacker’s dream. Because of that, merchants, payment processors, and consumers have to be increasingly on the lookout for attacks.
Follow some of life’s common-sense lessons. If it looks suspicious, move on.
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