Financial Tech and Digital Wallets: Innovative Approach vs Security Concerns

We are increasingly being equipped with newer and better payment methodologies. At the latest 2017 chapter of Consumer Electronics Show or CES, we have seen a few of these new approaches. While all these financial technologies and innovative methods of payment are likely to proliferate and grow, there is an equal level of security concerns. Just because we are in the middle of the first wave of Fintech adoption across the financial institutions, there are too many gaps visible in relation to security and compliance. New app developers and IT companies harbour a similar opinion. Juned Ghanchi of IndianAppDevelopers company leading mobile app development company in India recently told “delivering financial tech at the cost of security is the last thing we can think of. This is why the adoption is still slow across banks and financial institutions”. Before we evaluate these concerns let us have s look at the emerging Fintech, digital payment methods and the possibilities they offer.

New Fintech at CES 2017

This year at CES 2017 MasterCard offered some nifty innovations banking upon the connected environment and home IOT. It came with an app using which people can order their required groceries right from the Samsung made family hub refrigerator. The smart refrigerator which is supposed to arrive I the market later this year will remain connected with the app and allow users to create, manage, and share their list of required grocery items all through the week accordingly place orders as and when they need. It is needless to say to pay for the required items you can pay with your MasterCard. MasterCard also has taken positive steps to make payment easier through all kinds of wearable devices including fitness bands and smartwatches by partnering with Coin.

New integration of smart pay

In CES 2017  Samsung has announced that its Gear 2 will be equipped with Samsung Pay, the digital wallet app of the company. In the coming time, we can see more device manufacturers integrate digital wallet services. The increasing integration of smart pay services with new devices and interfaces will push towards more digitization of retail, money handling and finance. Rabin Dsouza of app development company SushMobile when asked about the future of digital wallet said that “the integration of digital wallet with headsets, smartwatches and other wearables will bring new twist to the scene of smart money”. He also said that this is a perfectly timed decision on the part of Samsung to integrate its smart pay solution with Gear 2.

Bitcoin, the beginning of digital currency

Bitcoin as a digital currency quickly became popular both as an investment option and means of payment. Any business owner can declare accepting Bitcoin as a mode of pay. All you need is to choose a Bitcoin wallet, and you are ready to accept Bitcoin for transactions. The biggest draw that can easily make this cryptocurrency a future bet for investors is the value it gained and the growth proposition. A single Bitcoin now worth more than $1000 USD and is considering the growth prediction for the time to come it is expected to fetch more investment and demand from investors in the coming years. Naturally, we can expect more businesses are embracing this digital currency for making payments and transactions.

Bitcoin has not the last word to say; there is Litecoin

Most of us who just missed the flight of Bitcoin from mere pennies to the level of most valuable digital currency worth more than $1000, still revel at the sweet possibilities of investing a bounty at the right time. But since like many good things you just cannot get your chances back, you need to look forward to another alternative.

So, we have Litecoin, another cryptocurrency that emerged with a strong proposition for digital currency users and investors. Litecoin, unlike Bitcoin, offers a more advanced technology ensuring faster payment and comes with a robust supply of coins amounting 84 million. Moreover, while mining Bitcoin requires havoc energy usage, Litecoin is more energy efficient. Finally, at present, the later currency comes as cheap though both the currencies are predicted to gain popularity and remain stable over time.  Naturally, investors who missed the flight once in case of Bitcoin may find an ideal alternative in Litecoin.

What is at Stake?

It is needless to say that any software is vulnerable to emerging and new security flaws. In that respect, no digital currency or digital pay software is no different. If they work perfectly without any performance glitches reported so far, that does not mean time has come to consider them as a safe haven for investment. Moreover, as cryptocurrencies and digital wallets have just started to become integrated with our routine transactions and financial activities, smooth adoption will continue to be challenged until and unless they become standard modes of payment and transaction. At present, the vast majority of businesses are still ignorant about these financial technologies that can positively allow them more precision, flexibility, and speed in transactions.

Another major challenge is there in relation to the adoption of the new methodologies by financial institutions and banks. Most of the financial institutions still now underplay digital pay and cryptocurrencies in their scheme of things.

Mobile pay and biometric authentication

Mobile payment methods including bank transfers and cards are more secure now with the protection of biometric authentication. The fingerprint scanner or face detection software in some handsets and platforms allow the users to register his biometric information with the device and thereafter use them for any transaction when it needs authentication. Thanks to biometric authentication security vulnerabilities with mobile payment could be minimized to a great extent. In future, we can expect the proliferation of such digital transactions with biometric authentication limiting the security threats and breaches to a minimum.

Blockchain and bitcoins

Blockchain offers an excellent approach to uplift the security arrangements for all kinds of transactions made with digital currencies. Basically, it is a public ledger which remains open to various parties. The fundamental purpose of this is to record all the anonymous transactions without allowing any other to alter and change them. The best thing is once a transaction is recorded in this ledger it cannot be altered or deleted. So any transaction involving Bitcoin is recorded allowing anyone to view the details of the transfers. Allowing a comprehensive and detailed ledger account of all the digital transfers it helps to build transparency and clarity in the transaction. Any kind of physical ledger just cannot tamper or erase the recorded data in the Bitcoin. Blockchain offers truly a revolutionary way to deal with the security vulnerabilities associated with the Bitcoin.