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3 Reasons the Mobile Payment Industry Has Inadvertently Prevented the Adoption of Wireless Payments

Wireless payments have been considered the wave of the future for several years yet the technology is still not widely adopted.  There are a variety of reasons for this, but it all boils down to a lack of security.  A number of Internet security threats associated with wireless technology remain unaddressed.  While the mobile payment industry is the greatest benefactor of implementing this technology, they have inadvertently prevented these Internet security risks from being solved.

There Still Isn’t a Universal Standard for Security

A major problem is the lack of universal Internet security standards for wireless payment technology.  Google and ISIS wireless payment technology utilize NFC (Near Field Communication) based internet security standards.  NFC still has numerous Internet security risks which have not been resolved.  PayPal relies on cloud based systems.  Experts argue cloud-based Internet security systems are closer to resolving the problem, but there are still additional measures which must be taken.  With multiple types of wireless security standards, merchants find it difficult to implement a comprehensive security system which can adequately address both types of security standards.

Major Companies Are Not Helping Either

In the beginning, experts assumed major communications and financial companies would drive the discovery and implementation of Internet security solutions for wireless payment technology.  Currently, many companies are promoting the use of ISIS wireless payment technologies.  To use ISIS, merchants must purchase terminals which are NFC enabled.  At the current rate of penetration, NFC terminals will not reach significant market penetration before 2015.

Major companies support a variety of cloud-based solutions.  The benefit of this approach is there are few hardware specific requirements because the customer only needs to enter their phone number and pin.  At the same time, the lack of uniformity creates a larger number of potential Internet security complications.

Both Platforms Still Have Security Risks

Until the mobile payment industry decides what type of security standard to use there is little chance a universal solution will be adopted.  As long as the risk remains high, most people continue to shy away from wireless payments.  Since this technology is only a convenience, rather than a necessity, most people are unwilling to switch until the Internet security issues have been addressed.

People Are More Aware of Wi-Fi Risks

To complicate the issue, today’s consumer is a more aware than ever of the risks associated with unsecured Wi-Fi hotspots.  While the underlying technology of Wi-Fi, NFC, and cloud-based wireless payments are notably different, the average consumer views them as the same.  All of the risks associated with Wi-Fi hotspots are transferred to wireless payment technologies, whether they exist or not.

Wireless payment technology is still a few years away from being adopted on a large scale.  Until there is a definitive winner between NFC and cloud-based solutions there is little chance the major underlying security issues will be solved.  Unfortunately, the mobile payment industry as a whole will be forced to choose a single security standard to make any significant headway.

Jake Kertie writes articles about internet security. He is passionate that the internet be a free and available to all without invading the users’ privacy. Jake makes suggestions, such as the ones mentioned above, and using a VPN to protect your privacy online. The VPN Jake recommends using is the following: http://www.goldenfrog.com/vyprvpn

{ 2 comments… add one }
  • Ludwig

    May 29, 2013, 9:36 pm

    Yes, Wi-Fi hackers and other cyber criminals are now targeting mobile devices because many people don’t know how to protect their devices properly. I know a bit more than the average Smartphone user, but I don’t dare to pay with it yet. Thanks Bilal for the share!

  • Samir Kapoor

    May 27, 2013, 2:42 am

    I am agree with you Bilal, because even still we are facing Security Risks in banks and credit cards due to lack of SSL and other factor. Nice article, keep sharing.


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