Are Mobile Payment Apps Safe?
In order to answer that question, we must first understand how mobile payment applications came into being, how they have evolved over the years becoming a cornerstone of modern society, and the implications of this ever-evolving technology.
This takes us back to 1997 when the first electronic payment app was launched by Merita Bank of Finland. The SMS-based system was a huge success and laid the groundwork for payment app development today.
Despite being popular, it wasn’t until the Covid-19 pandemic engulfed the global economic sphere that contactless payment apps became commonplace.
Several factors contributed to the surge in contactless payment apps (up to 76%) in 2021. During the pandemic, there was a growing need for contact-less deliveries and cashless transactions. The increase in digital transactions was a fruitful one in many ways. It was a necessary step towards financial inclusion for developing economies.
This was reflected in increased economic opportunities across the world (80% increase in digital transaction and account ownership in India, and 40% in China), and a narrowing of the gender gap, heralding a new age of financial resilience that would not only resuscitate the global economy from the effects of the lockdown but also protect it from the implication of future pandemics.
Studies show that half of the world’s population, i.e., 4.8 billion people, will be using digital wallets in 2025. With the number of digital platforms and payment systems available and the sheer volume of digital transactions made on a daily basis, now is a better time than ever to ask just how safe mobile payment apps are.
Are Mobile Payment Apps Safe?
The top mobile payment apps are used for many reasons. They make the buying process more efficient and provide a seamless way to transfer funds. It is nice to live in a world where you are not rushing to count your change while holding up the line at a grocery store. We have all thanked the digital gods for Venmo because it is awkward to hand out cash in social settings. But the ease these applications provide as well as weak payment app development processes has also made us the ideal prey for hackers and fraudsters.
On more than one occasion, hackers have gotten control of a mobile payment app, resulting in the loss of millions.
But there is more.
When electronic payment apps are hacked, the loss isn’t just financial. Hackers get access to personal information, and this can have grave consequences. In 2020, the Bharat Interface Money app was hacked. The personal data of millions was made publicly accessible. This included their names, dates of birth, educational certificates, biometric details, place of residence, and more. Following the investigation, the Computer Emergency Response Team (CERT-In) found that the breach was possible because 409 GB worth of data was stored insecurely by the service provider, BHIM.
More recently, the Xenomorph malware has plagued 56 European banks, compromising 50,000 mobile banking accounts. The hackers have created their own system which involves putting a screen over a running app, tricking the users into revealing confidential information. Xenomorph is a threat to crypto digital wallets as well. Hackers tend to target a certain application on a device, and once they have access to it, they move on to other applications, which means more than one area of your life is under attack.
The goal of a hacker is to harvest data, hence the use of flexible malware. The adaptive aspects of this type of malware suggest that not only are digital banking systems evolving, but the threats associated with them are too.
Security Features Offered by Top Mobile Payment Apps
There are many contactless payment apps, and they all offer the ease of making seamless digital transactions. The most popular apps also offer safety features that allow us to make digital transactions with a sense of security.
Apps from Apple and Google are known for going the extra mile to ensure the privacy of their users. Your personal information and other data will not be used by a third party if you use their applications.
Applications such as Venmo and Paypal are more secure in the sense that they allow you to double-check who you are transferring or receiving funds from, making them excellent for business transactions.
With the help of two-factor authentication, Apple, Facebook, and SqaureCash make their protocols clear to the user and implement a necessary layer of security for digital transactions.
Most mobile payment applications are screened for their shortcomings by bug bounty programs, and it is often a necessary step that companies apply to all their new launches.
A notification system will alert you to transactions initiated without your knowledge. Certain banking apps will alert you when you log in to your account. In case of a stolen or lost card, the notification system will alert you to any malicious activity taking place.
Taking extra care to protect your payment apps goes without saying. An app lock is a great way to guard your personal information from hackers. Educating yourself on digital security is a great way to protect yourself. When you understand how hacking attempts work, you can better protect yourself against them.
Unfortunately, there are no apps that will smoke out a scam if you make the transaction and follow all the necessary steps. In fact, many scams are deployed with the help of shelf companies with stellar accounts, and identity verification. Understanding the inner workings of an organization, the services they provide, and whether or not they are legitimate falls under a bank’s standard procedure, but there is no one-size fits all approach to prevent theft and scams.
How to improve mobile payment app security?
With the assumption being that electronic payment apps will become more popular and digital transactions, commonplace, the general security of these mechanisms will have to be taken into account. There are many different aspects to consider in order to come up with safer mobile payment applications.
Here are some areas for improvement for top mobile payment apps
Mobile devices act as a type of remote control for our lives. We cannot expect mobile applications to work separately from the devices that they are on. Most hacking attempts make use of information that they find on a mobile device to then access the banking app or digital wallet. If your phone is lost or stolen, the data on it can be easily compromised. Device security is crucial to safe digital transactions. Using outdated mobile devices can have a negative impact as the official applications are often created keeping in mind the latest software and mobile devices. Outdated devices do not support these applications well and that can strain security measures giving hackers and malware leeway.
Similar to mobile devices, losing a card can also put you in danger of fraud and malicious activity as they carry important information such as the name of the cardholder, expiration date, and the CVV.
This goes without saying but the use of public networks is discouraged for all kinds of activities. Digital transactions must only be made on secure networks. Warning against the dangers of using public WiFi should be incorporated into top mobile payment applications to protect users from hackers.
PCI and Payment Gateways
Here’s another way to determine the safety of the mobile payment app you are using and that is PCI compliance. The PCI payment gateway is a payment system that adheres to the compliance of The Payment Card Industry (PCI) during the process of payment app development.
If an application is PCI compliant, it adheres to a set of security standards that have been developed specifically to protect users’ information during and after a financial transaction.
The Payment Card Industry Data Security Standard (PCI DSS) ensures maximum security for users when they make digital transactions. It is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit card information maintain a secure environment.
Digital compliance is a must in all areas of life. From counting calories to find a dog sitter, there is an app for everything, so why not digital transactions?
An app for making fast and secure transactions is a necessity given the rapid digitization of our lives. Electronic payment apps provide utility be it for personal use or for commercial purposes and there is no way around it. There are many mobile payment applications to pick from and despite being quite safe and beneficial to the masses, the need for the ultimate secure contactless payment app is deeply felt.
What is your mobile payment app of choice and why?