The risks of replacing credit cards with mobile phones

Mobile Payment Security

Mobile Payment Security
Credit cards have a new cousin as cell phones enter the mobile commerce marketplace with the technology to pay for a purchase in a brick-and-mortar shop with nothing more than a wave of the device.

Though some are eager to start using it, others are wary of the process. This concern may not be entirely unfounded. It seems that many of the policies and laws that have been put into place to protect our money and credit aren’t yet aligned with the latest in technological advancements.

The Consumers Union has released a report about the way in which the technology functions for mobile payments, and the concerns that it raises.

The term “mobile payment” itself is an all encompassing expression that refers to the ability to use a mobile device to wave it over or tap it on a pad in order to make a purchase. Other types of mobile payment also include being able to make a purchase by way of a text message, or by downloading apps, or through web browsers on a Smartphone.

What has been overlooked by many so far is that it’s not necessarily how you pay that is bringing the risk, since the developers of the technology have gone to great lengths to hold off attempts to hack into the systems, and to protect data privacy during transactions. It is the source of the funds which causes the greatest worry.

There are a number of different types of accounts that can be used for a mobile payment. This includes debit, credit cards, prepaid cards, bank accounts, gift cards, or even having it added directly onto your cell phone service bill. Every one of those account issuers has its own policies for mistaken charges, fraudulent charges, and identity theft.

Before you start to use your mobile to make payments, it is important that you look at the source of the funds – for example, the credit card you link to your device – so that you understand your liabilities and coverages if or when something goes wrong.

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