“Cash is king”, as the saying goes. But you just have to look at the stats to see that cash is quickly losing its crown. With people increasingly developing a liking for contactless payments and its convenience and with new mobile solutions promising to revolutionise the way we pay, it’s only a matter of time before we find ourselves living in a cashless society – a trend we currently see happening in Sweden.
The fear factor
When we surveyed 2,000 consumers from both the UK and the US, it was revealed that over two thirds (68%) worry about making purchases using contactless technology or their mobile phone. Having their financial data stolen by hackers was cited has people’s biggest fear when using digital payments, whilst nearly one in five (18%) worry that their identity could be stolen by fraudsters. For over one in ten consumers (13%), not knowing where their data actually goes was their biggest concern when using the alternative payment technology.
These fears are, undeniably, a barrier to a widespread adoption of mobile payments. Because whilst there has been plenty of hype around the launch of new mobile payment apps such as Apple Pay and Samsung Pay, uptake has been somewhat slow. For example, since 2015, just 0.4% of payments on the London transport network were made using Apple Pay and in the US, just 12% of Americans plan to use mobile wallet technology within in the six months. Overcoming security fears, then, needs to be a priority if consumers are going to put their trust in the technology.
However despite their fears towards the technology, nearly half of those we surveyed (47%) do not take more precautions to protect their data on their smartphones. In fact, one in ten (10%) of consumers admitted they do not know how to protect their data on their phone.
Security first approach
As in any area, new processes create new security vulnerabilities and potential attack vectors. Theft or misuse of payment data will very quickly kill emerging payments methods. Time and time again, strong encryption, underpinned by hardware security modules (HSMs), has been shown to be the preferred means of securing payments. HSMs can provide organisations in the mobile payments sector with the trust anchor for ensuring the highest standards of data protection and management of cryptographic keys, complying with best practices and pertinent regulation.
Only time will tell if consumers will widely adopt mobile payment technology, but in the meantime security professionals need to take into consideration the necessary security measures, throughout the entire payment journey, for innovative new payments methods to prosper.