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Avoiding a rear view mirror approach to m-payment security

The Federal Reserve Bank of Atlanta recent report on the risks of mobile payment transfers, highlights the numerous security issues that must be addressed in order for widespread adoption in developed economies.

Mobile payments require a whole new approach to security and this will require an unprecedented degree of cooperation between the telecoms and FS sectors; new financial regulations applicable to the telecoms sector will need to be agreed upon, the opportunities for money laundering removed, the gaps in regulatory oversight plugged and, of course, the opportunity for identity fraud significantly reduced.

Protecting consumer identity has always been a challenge and the viruses, malware, and phishing attacks common to the online environment will also need to be addressed on the mobile. However, the FRBA’s report suggests that the issue of customer verification could actually be tackled relatively easily since “certain aspects of mobile handset technology may be leveraged to provide more secure transactions—by using identification tools to authenticate the user”. Biometric security, and in particular voice biometrics is referenced in the report as a key choice for mobile security being both incredibly secure as well as convenient.

While it is tempting to assume that the same old password protection could be implemented for mobile transactions, this would be a significant step backwards. Password protection is not secure enough to protect online consumers against all phishing and malware attacks and is likely to leave mobile users equally vulnerable to identity fraud. Additionally, consumers expect a convenient and easy to use service from their phone and passwords can be tricky to remember and cumbersome to use. Consequently, we cannot afford to fall back on tried and tested solutions and a new secure and convenient solution will be critical to success.

A forward thinking, cooperative approach between the FS and telco sectors is required to reduce the risks associated with mobile payment transactions and achieve widespread adoption of mobile payments. Cooperation and innovation is key. To expand on the analogy used by the reports author; when securing the mobile payment channel, one driver who focuses his attention on the rear view mirror will not be enough to ensure success.

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