Mobile Payment: How Secure Is It?

It works in India. On every street corner in India. There, digital collection bags are already standard in the church. But what about the security of mobile payments? The essentials in the letter:

1. The Indians are still skeptical about mobile payments – in other countries, this has long been part of everyday life.
2. Technical solutions are relatively safe if you pay attention to a few things.
3. Most importantly, the smartphone and the payment apps should continually be updated. It’s best to let it update automatically.

Mobile payment, in India, paying with a smartphone, is on the rise worldwide. In India, you can pay with your smartphone at every kiosk. In India, on the other hand, many remain skeptical. Even in trade, banks and technology companies already offer this service in many cases.

How Real Is The Danger?

Two systems come together in the contactless payment process whose security alone arouses skepticism: credit cards and smartphones. Contrary to what was feared, however, the prevailing technical standard – the smartphone equipped with NFC (Near Field Communication) – is a comparatively secure technology. If criminal hands are at work, a radio-enabled credit card can be spied on using manipulated readers. On the other hand, the smartphone is primarily protected by contactless communication in the near field. 

Because the data sent from the mobile phone to the data terminal at the supermarket checkout is not a 1:1 transfer of your bank details, such as your credit card number, but merely an encrypted copy that only applies to the payment process that you are currently approving. This process is known as “Host Card Emulation” (HCE). In short: If you teach the smartphone to be a credit card, you are better protected against misuse than with a plastic card.

Can My Smartphone Even Do That?

You can get started with any newer-generation Android smartphone using the Google Pay service or a third-party payment app. Apple users must use the Apple Pay service where available. There are no third-party apps on the iPhone because Apple does not release the NFC interface to other service providers.

Secure Element, Host Card Emulation, PIN Request

The technology has so far allowed two options for securing bank data:

1. The equipment of the smartphone with a so-called “Secure Element.” This chip is built into the smartphone or a specially equipped SIM card.
2. Cloud-based: Everything necessary for technical security is encrypted on an external server – usually the banks.

Both intelligent solutions with the Secure Element and the software variant HCE (Host Card Emulation) are currently considered comparatively secure against criminal activities such as identity theft, phishing, etc. It is still challenging for criminal hackers to crack crypto encryption. However, you have to decide how transparent or anonymous you want to remain in your shopping behavior with Google or the Sparkasse. As a further security measure, a PIN query, fingerprint reading or face recognition are usually required for more than 25 euros.

Mobile Payment: You Should Pay Attention To This

1. Always keep the device software of your smartphone or smartwatch up to date and use automatic updates.
2. To prevent radio-enabled cards from being read out unintentionally, you can use a protective cover that reliably blocks radio waves.
3. If your wireless card or smartphone with usable payment functionality is lost, you should act immediately. Have cards and accounts blocked immediately? In most cases, the central blocking emergency number, which can be reached around the clock on 116 116, will help free of charge.
4. Check your statements regularly and report incorrect debits to your bank immediately.
5. If you have concerns, you can switch off contactless payment with NFC cards at some banks and savings banks. If necessary, ask your bank or savings bank.

Also Read: Why Companies Need An Active Data Strategy