With the fast-growing online market and supply of mobile devices, it’s no surprise that they constitute approximately half of the global website traffic.
That contributes to the increasing need for Financial technology, or Fintech, companies to adopt easy online payment transactions using mobile phones. As a result, consumers can quickly pay for goods and services online from virtually anywhere without the need for cash or physical cards.
The spread of mobile connectivity undeniably plays a significant role in the increasing adoption of mobile payments worldwide. In the UK, it’s anticipated that the number of individuals who use smartphones for contactless payments will increase by almost four million.
Mobile payment is one of the most unprecedented innovations in Fintech. However, despite the convenience of mobile devices in facilitating instant payment and settlement, Fintech firms encounter cybersecurity issues concerning this contactless transaction.
Besides a mobile device, the mobile payment process involves various components. These may include the merchant, point-of-sale (POS) system, and financial organizations processing merchant payments.
As demands for mobile payments continue to grow, cybercriminals will use advanced attacks to target any of these stages in the payment process. Considering this, how can Fintech firms mitigate the security risks of mobile payments?
Also read: Revolutionizing Payments with Mobile: How Payment Mobile is Changing the Future!
Regularly Assess Mobile Payment Risks
Mobile payment services directly transmit financial information, such as card details, bank account numbers, and personal identification. It’s a common concern for most consumers to put such sensitive information on their mobile devices.
But alternatively, they’re more inclined to use mobile payments if they have confidence that the provider takes adequate measures to secure their payment services.
That makes security a critical requirement when maintaining customer trust, an asset Fintech firms can’t afford to lose. Hence, they must be aware of the risks linked to mobile payments and conduct regular assessments to establish controls better.
Although there’s a multitude of security risks associated with the mobile payment process, Fintech companies should be particularly conscious of the following:
Data breaches
Multiple players are involved in the mobile payment process, all of which require gathering the transaction to make a purchase.
A data breach happens when a cybercriminal effectively infiltrates a data source and extracts sensitive information without an individual’s consent. In mobile payments, a data breach commonly occurs by bypassing network security remotely through various means, such as malware attacks.
When that happens, payment card details and other financial information can be used for unauthorized transactions, leading to identity theft.
Also read: Difference Between Mobile Payment Systems.
Malware attacks
Malware attacks use malicious software to disrupt a system or network and illegally gain access to a device, including a smartphone.
In terms of mobile payment security, malware can be used to compromise the security of mobile devices. Specifically, it aims to gather sensitive information like account passwords and credit card details. Most activities associated with mobile malware include the following:
- Intercepting instant messages
- Recording phone calls
- Transmitting call logs
- Locating through GPS
Application vulnerabilities
Many mobile payment systems rely on SSL (Secure Socket Layers) or TLS (Transport Layer Security) to protect users’ data on the internet. But the implementation of SSL and TLS protocols may have vulnerabilities, and malicious users may exploit them to breach payment security.
Additionally, SSL and TLS are vulnerable to man-in-the-middle attacks. It happens when an attacker sits between the mobile app or device to intercept or manipulate a user’s interaction with the payment application.
When that happens, the encrypted information gets exposed to the attacker in plain text, putting the user’s personal and payment details at risk.
Enable Multi-factor Authentication
With the alarming number of data breaches, more than single-factor authentication is needed to safeguard mobile payment transactions.
Although password-based login is the most common way to authenticate accounts, it can easily leak information to an attacker. Fintech companies must be extra careful when processing user login credentials.
There must be strict measures to verify the user’s accounts when purchasing, such as enabling multi-factor authentication. A security system requires multiple methods to authenticate the user’s identity for a login or payment transaction.
For instance, SMS confirmation codes and multiple biometric authentications can provide additional layers of protection to the mobile payment process. Since it involves authenticating various payment elements, it would be more difficult for fraudsters to access the users and steal information.
Establish Application Security Infrastructure
Fintech firms often use applications with access to users’ financial profiles when executing real-time payment transactions. But these apps are frequently targeted for attacks. Moreover, weak coding can be an entry point into financial networks, providing access to potential threats.
Fintech firms must establish a robust application security infrastructure to safeguard mobile payment users’ data. A typical example is incorporating a web application firewall with up-to-date information on security threats.
Use an Automated Threat Detection System
Cybercriminals are using automation to increase the effectiveness and persistence of their attacks. Hence, it’s more crucial than ever for Fintech firms to incorporate integrated and automated defences and threat intelligence to enhance payment security.
Fintech companies can instantly detect and mitigate new threats that target mobile payments using an automated threat detection system that uses machine learning. Additionally, it can spot behaviour that may indicate a malicious activity or security breach in the mobile payment process.
Conclusion
The ease and convenience of mobile payments are evident in today’s digital landscape. However, it has its drawbacks, like other technological advancements.
To ensure consumers’ trust and confidence, Fintech companies must take all the essential measures to secure the mobile payment system. Likewise, users must exercise caution when they use any payment app to prevent fraudulent transactions.
