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Card Company’s boosting Payment Security with Mobile

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Whoever thought that one day, paying with green paper would be viewed as primitive as a horse and buggy? We seem to be getting closer to that time, especially since the security of making payments via smartphone is always being improved.

5WOne way is with fingerprint scanning. Some smartphones already have this biometric feature. But what about credit cards and biometrics? Visa is currently experimenting with biometrics, but nothing yet has been deployed to the public. Nevertheless, a credit card company trying to develop something with biometrics will likely need to get involved in the smartphone arena.

There will always be the consumers who want to stick to the old-fashioned method of using cash, just like there are always those strange people who insist on buying the kind of stamps that you must lick (or wet with tissue paper) rather than the self-stick ones. But hopefully, credit card companies will cater to both kinds of people amking the new technology stupid simple.

If the credit card companies come out with biometrics tied into the mobile device, it will likely be a fingerprint scanner vs. face or voice recognition, but the fingerprint password will be sufficient security after long term testing.

New technology is never carved in stone, but let’s at least get it out there and see how it works. Let’s see how new technology like biometrics in a mobile (like Apple pay) can combat credit card fraud.

In the meantime, card companies and consumers (and banks) must continue to wrestle with the rampant crimes involving credit cards. Recently, MasterCard teamed with Syniverse, a mobile technology company, with the goal of stifling fraudulent use of credit cards.

MasterCard’s approach relies upon the smartphone geolocator. The company’s plan enables the card to be used only if it’s within a certain range of the owner’s smartphone. Though at first, this sounds fool-proof, it has a flaw: What if the thief is within that range? Obviously, if the card is swiped a thousand miles away from the holder’s mobile device, the thief will fail. This new technology hinges upon the thief being outside that range.

A perk of this new technology is that it eliminates the hassle of the holder having to notify the company that they’re traveling so that transactions won’t be declined—because the transaction will occur near the holder’s smartphone—unless a thief makes off with the smartphone and just happens to get out of range.

Robert Siciliano is an identity theft expert to BestIDTheftCompanys.com discussing  identity theft prevention. For Roberts FREE ebook text- SECURE Your@emailaddress -to 411247. Disclosures.

Making a Case for Mobile Payment

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Mobile payment can transform your shopping experience, making it more convenient and easy—and it’s secure, too!

Forbes reports, “Shopping has become very impersonal. Few people have a relationship with a salesperson who knows their style and preferences and can direct them to the right items at the right prices as soon as they walk in the door. But wouldn’t that be nice? Preferable, certainly, to wandering cavernous stores, fending off pushy salespeople who don’t even bother to learn our names, much less our favorite colors and fabrics.”

Mobile payment will mean much more one-to-one marketing—meaning specific deals and promos could be specially targeted to individual consumers based on their buying habits. Sooner rather than later, based on the information on a mobile phone app that consumers carry while shopping, they will be “recognized” as being in the store and recommendations, discounts, coupons—all in the form of specific customized offers—will pop up.

And mobile is secure, too. There are various mobile payment delivery options. Near field communication is a contactless delivery system that involves a chip that is either built into the phone itself, into a card within the phone, or a sticker attached to the phone. There are also new applications that facilitate mobile payments, most of which involve a barcode that the user scans at a store register.

As you increasingly use your phone for mobile payments, be aware that the phone correspondingly increases in value to thieves and hackers. So keep track of your cell phone. You wouldn’t leave your wallet on a bar and walk away, and you shouldn’t do that with your phone, either. And be cautious when visiting websites on your phone’s browser, clicking on links or responding to text messages.

So how do I conduct safe mobile payments?

  • Pay attention to your credit card statements to check that you are paying for what you actually purchased.
  • Only download mobile payment applications from a reputable app store. Check user reviews of the app and make sure to read the app’s privacy policy regarding what data of yours it is accessing and sharing.
  • Don’t conduct any mobile transactions over an unsecured WiFi connection. It’s much more secure to use your mobile data network.
  • Keep your mobile software current. This includes installing the latest updates for your operating system, mobile browser and mobile security software.

Robert Siciliano, is a personal security expert contributor to Just Ask Gemalto and author of 99 Things You Wish You Knew Before Your Mobile was Hacked! . Disclosures

Standards Will Bring Mobile Payment

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Mobile payment has been around for years in numerous forms for purchases such as downloading music, ringtones and various other services and is now gaining traction for retail purchases in the U.S. But its implementation in the U.S. is a bit slower due to a lack of standardization of payment methods and the overall security concerns of mCommerce. Some consumers in the U.S. have had bad experiences with criminal hacking and data breaches and are concerned about their security and are waiting for the various handset manufacturers (those who make the phones), mobile carriers (those who provide mobile service) and third party technology providers (those who make the technology facilitating financial transactions) to agree on standardization leading to more secure transactions.

However, for many years in Japan and South Korea for example, mobile penetration has been much higher and many people don’t and have never owned PCs (or have been hacked) as they function purely from mobile devices. Security hasn’t been as much a concern. It’s a perfect example of “ignorance is bliss.”

Consumers in the U.S. overwhelmingly want mobile payment. A recent study by Mobio showed “49 percent of Americans said they’ve used their mobile phones to make a payment or purchase in the past three months. And 77 percent of the 1,085 respondents in North America said they would be interested in using their mobile phones to make a payment or purchase. The response was higher — 84 percent — in the 35 to 44 year old age group and among Canadians (86 percent versus 72 percent of U.S. respondents).”

Near Field Communications (NFC), the engine behind mobile payments comes in a variety of forms and there are multiple players trying to makes theirs a standard. Bank Systems Technology reports the disagreements involve banks, credit card companies and the third party technologies all coming together with mobile carriers. The mobile carriers want to control near-field communication and mobile payment fees by maintaining control over the phones payment technology containing their users’ credentials. Mobile carriers see the devices they support as revenue generators that should grant them mobile payment per transaction fees.

Meanwhile, consumers crave mobile payment and must adapt until the big guys fight it out to see who ends up top dog. However, because there is a relatively low security risk in mobile payment, consumers stand to benefit by trying out and adopting the various methods presented. I’m frequently using 2-3 methods such as the Paypal App which allows me to send and receive payments and Square which allows me to make and receive credit card payments on the spot. I find both convenient and fun!

Robert Siciliano, personal security expert contributor to Just Ask Gemalto.

Mobile Payment Set to Dramatically Increase

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Mobile payments generally involve three participants: the mobile device, the merchant, and a financial service provider or trusted third party.

That trusted third party, or TTP, is an established, reputable fiduciary entity accepted by all parties to an agreement, deal, or transaction. A TTP authenticates and authorizes users in order to secure a payment transaction, and acts as an impartial intermediary for the settlement of payments and any problems that arise after the transaction has occurred.

There are various mobile payment delivery options. Near Field Communications is a contactless delivery system, involving a chip that is either built into the phone itself, into a card within the phone, or a sticker attached to the phone. There are also new applications that facilitate mobile payments, most of which involve a barcode that the user scans at the register.

The statistics for mobile payment are impressive. The U.S. mobile payment industry encompasses a number of categories, including mobile bill payment, mobile point of sale, m-commerce, and mobile contactless. Mobile bill payment, in which consumers pay bills via mobile phone, currently makes up the bulk of the U.S.’s mobile payment industry. Mobile point of sale, in which a consumer’s phone is used as a point of sale device, accounts for just over 5%, but is expected to grow by 127% in the next five years, to $54 billion in transactions. Mobile contactless is expected to grow 1,077% by 2015. The gross dollar volume of mobile payments overall is expected to grow 68% by 2015.

This is all very exciting, but the Payment Card Industry Standards Council is not yet granting approval to any mobile payment applications. With the explosive growth of the mobile payment industry, they are holding off and waiting to see which technologies rise to the top. This shouldn’t be a concern for mobile phone users, though, since the merchant, rather than the customer, undertakes the bulk of the risk.

Meanwhile, as you increasingly use your phone for mobile payments, be aware that the phone correspondingly increases in value to thieves and hackers. So keep track of your cell phone. You wouldn’t leave your wallet on a bar and walk away, and you shouldn’t do that with your phone, either. And be cautious when visiting websites on your phone’s browser, clicking on links, or responding to text messages.

Robert Siciliano, personal security expert contributor to Just Ask Gemalto, discusses mobile phone spyware on Good Morning America. (Disclosures)

Mobile Payment is Coming

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Near Field Communications, or NFC, is the exchange of information between two devices via wireless signal. For example, a wireless signal emitting from your cell phone can act as a credit card when making a purchase.

This year, over 70 million mobile phones will be manufactured and sold with NFC built in.

NFC can be used in other ways beyond credit card transactions. It can integrate with hardware, such as your car, to unlock a door. It can activate software.

Soon enough, using your phone as a credit card will be commonplace. Mobile contactless payments, in which you pay by holding your phone near the payment reader at the register, are expected to increase by 1,077% by 2015.

According to a study by Boston-based research firm Aite Group, “The gross dollar volume of U.S. mobile payments is estimated to grow 68 percent between 2010 and 2015, but the mobile payments will continue to represent only a ‘tiny portion’ of U.S. consumer spending for many years.”

Mobile payment is still in the testing phase in the United States, Canada, and other countries around the world.

Security is paramount. A new type of smartcard-based SIM is at the core of mobile payment security. It contains a small computer with its own software designed to protect the payment account information. Your credit card provider will make sure that mobile payment is fully secure, or it will not happen.

Robert Siciliano, personal security expert contributor to Just Ask Gemalto, discusses identity theft in front of the National Speakers Association. Disclosures