Smartphone payments may not be as safe as we think, says the Federal Trade Commission.
As payments made over smartphones and tablets are on the rise, the Federal Trade Commission has just released a report regarding their perspective on the state of mobile security in m-commerce, and the possible downfalls that it presents.
One of the studies included in the report showed that smartphone payments will be mainstream by 2015.
The report from the FTC indicated that with this type of adoption as a guide, both carriers and transaction processors, such as AT&T, MasterCard, Verizon, Visa, Google, Intuit, and T-Mobile are all gearing up for tremendous growth within this environment. Even startups, such as the popular Square, have helped to make it easier for transactions to be accepted so that the field can become more mainstream. The FTC expects that more players, and more mobile security issues, should all be expected in the near future.
As the smartphone payments market expands, so will the treat from mobile security problems.
With more usage from consumers, more providers will also make their way into the marketplace, further expanding mobile payments as an industry. Dubious individuals will see this as a tremendous opportunity and the mobile security risks will begin to skyrocket.
A Federal Reserve study indicated that in the United States, 87 percent of people have a cell phone. Among those, 44 percent are smartphones. Inside of that figure, 12 percent have used the devices to make payments within the last year. The majority of those transactions took place in the form of online bill payments. That same survey indicated that mobile security issues are the primary barrier to adoption of the transaction method.
The FTC report looked more deeply into the trend of making payments with smartphones and tablets, including through NFC technology, apps, mobile wallets, and carrier billing. The majority of the respondents in the study found the convenience to be the most appealing feature to the service. Businesses also hope that it will bring about lower processing charges. However, they also identified dispute resolution concerns, as well as worries over mobile security in terms of data and privacy.