While you might be concerned about security issues, the mobile payments industry is expected to reach $214 billion by 2015, up substantially from the $16 billion reached in 2010, according to research firm Aite Group. Digital wallets make shopping easier and less time consuming.
“With digital wallets, your phone stores secure payment information linked to a credit card or prepaid debit card as well as gift and loyalty rewards cards,” says Andrew Kameka, managing editor of Androinica.com, a mobile products website. “If I go to a store and buy something, all I have to do is put my phone against the register and the funds are automatically deducted.”
If you pay for items using a digital wallet, security concerns are likely to be top of mind.
“Banks have put a lot of effort into designing mobile apps that are secure,” says Kevin Mahaffey, chief technology officer and co-founder of Lookout Mobile Security. However, it’s prudent to take additional steps to protect your financial information.
When making transactions:
Beware of spoofed invoices. Some thieves take advantage of unsuspecting buyers by selling items that don’t exist and running off with the cash. A spoofed invoice looks legitimate but it isn’t. Google Wallet warns customers on its website to avoid merchants that request payments through wire transfer or direct bank transfer. It also tells consumers to beware of sites that seek to break up high-priced transactions into smaller payments or amounts disbursed to several recipients.
Double-check Web links. Don’t fall prey to “phishing” attacks in which you enter personal information into fake websites. Before you log in, make sure you’re on the right URL. Also, log on to sites directly, rather than clicking on links in e-mails. Finally, avoid providing personal information such as your Social Security number via e-mail or online forms.
When using your phone:
Set a passcode. Thieves will have to break through another layer of security to access your data.
“Put an auto-lock on your device and set your screen to lock after five minutes,” Maheffey says.
About 62% of smartphone users don’t use a password on their home screen, which could contribute to the fact that smartphone users are 33% more likely than the general public to be victims of identity fraud, according to a study by Javelin Strategy & Research .
Use mobile security. Two apps, Find My iPhone and Where’s My Droid, allow you to lock your phone remotely and wipe out information if your phone is lost or stolen. Programs such as Lookout Mobile Security’s Lookout app keep your phone protected from malware and spyware in addition to providing remote data removal and cell phone tracking.
Update software. If there’s a security flaw on a banking app, the bank will generally release a software update to fix it. Download all updates as soon as you’re notified.
Pay attention to app ratings. Note the number of downloads or ratings an app has, or read reviews to make sure you’re downloading from a trusted source. That way you’ll minimize your exposure to malware.
Create strong passwords for banking apps. Passwords for any financial applications should incorporate letters, numbers, and symbols, and shouldn’t be used for anything else.