Three Major Issues to Watch For in Mobile Payments

Mobile payments have come a long way over the last few years, and have broken into the mainstream sufficient that there are plenty of users already on board with more coming on every day. Yet as a new report from KSL.com notes, there are also some pratfalls that come with the platform, and the report should serve as a cautionary tale for us all.

The first of these is issues of sellers not following through, particularly when peer-to-peer (P2P) apps are used. Apps like Venmo and Zelle make it easy to make payments, but should the recipient of the payment not follow up, there’s much less protection there than there is for a credit card. In some cases, there are insurance options, but unless these are known about in advance, they may not be useful to the end user.

Second, mobile payments platforms are somewhat more vulnerable to hacking. While mobile payments security has come a long way since its inception, the concept of a “man-in-the-middle” attack, where the hacker intercepts the communication between the end user and the bank and uses it to his or her advantage.

Third, there are costs involved with mobile payments. Using Apple Pay Cash with a debit card has no fees attached, but using it with a credit card comes with a three percent fee. This may not sound like much, but it can add up if multiple transactions are involved.

All of these points have at least some measure of mitigation. Not making purchases over public Wi-Fi, for example, is a great way to beat the man-in-the-middle attack; using only private connections greatly reduces the possibility of hacking. Mobile payments systems have deliberately pushed security for just this reason. Strong passwords help here also, as does a solid understanding of the mobile payments system you’re using and the purposes for which it’s meant. The first example is proof enough; don’t pay your eBay bill with Venmo. Rather, use a credit card or platform like PayPal that may have extra protection.

Mobile payments have risk, just like most anything else in life does. Some basic precautions, however, can protect us against these and let us take full advantage of the power and convenience offered therein. Keep these in mind, and you’ll come out ahead.