The current Smartphone revolution has conjoined along with its technological advances for every industry. Its contribution to the consumer financial services sector has been the globally appreciated electronic mobile payment system. Having replaced cards, mobile phones have become modern payment counters that provide personal empowerment and commercial facilitation in all kinds of fields.
However, with the emergence of this relatively new technology, faults and loop holes inevitably occur and hence are subjected to awareness.
Proximity payments and Remote payments are renowned forms of mobile payments. They both function smoothly at Point of Sale and E-commerce environment (far away from a shop) respectively. In this quick process, the transmitted sensitive financial data, such as account number, PIN and passwords are vulnerably exposed on the over-the-air, open cellular interface. The risk is drastically increased with the unavailability of standardized technology of payment on mobile phone operating systems.
Furthermore, the communication facility like SMS and voice text messages has opened up diverse options for hackers to steal confidential data. The radio signals sent from phones are at ease of theft. And, mobile phone payment has phenomenally introduced smishing (phishing through SMS) and vishing (phishing through voice mails) into cyber crimes. Smartphone’s have an added risk to theft due of 24 hours active internet connection on them. That is presumably the way of threat to consumers, adapting to mobile payments.
These risks may not be highly visible today, but evidence exists of their growth with the use of mobile phone payment systems. Leaking of financial data has given way to misuse, loss of money, disclosures and fines. For companies, enabling mobile payment systems would mean an increase in the cost of security schemes and painful rise in service demand for consumers.
Moreover, companies slip into competitive disadvantage due to consumer’s inability and lack of trust in the payment system.
Nonetheless, mobile payment systems are most beneficial in many aspects. They have claimed the position of ‘Easy payment option’ for all. But, withstanding the facts, the growth of mobile payment systems would require serious dedication from developers to reinforce safety and uniformity into this partially innovative idea.