Advancements in mobile payment security technology are curbing risks and improving consumer trust beyond levels traditionally associated with plastic payment cards, according to new research from global IT associationISACA.
The report cites tokenisation, device-specific cryptograms and two-factor authentication as key improvements positioning mobile payments appeal to both consumers and vendors.
"Mobile payments, with embedded, improved and transparent security controls, are a great example of how security can act as a business enabler, contributing to the creation of end-user trust," says Dr Christos Dimitriadis, ISACA board chair and group director of information security for INTRALOT.
The report outlines several advantages of mobile payments relative to physical and e-commerce transactions.
- Tokenisation: Secure mobile payment applications-or mobile wallets-do not transmit a card's primary account number (PAN), instead sending a randomly generated token to the point of sale (POS) terminal and payment network. This token safeguards the consumer's data while in transit. "tokenisation is the security solution that is pushing mobile payments ahead of card payments in consumer sensitive financial information protection in the continuous race to stay ahead of hackers and other threats," according to the ISACA guide. The tokens can be configured to only work for transactions that match specific criteria for an exact period of time, specific retailer and certain monetary amount. Only the issuing bank and authorized entities can securely map tokens back to the original payment card data.
- Device-specific cryptograms: The cryptogram ensures that the payment originated from the card-holder's device. If a hacker obtains mobile payment transaction data, the cryptogram that is sent to the POS terminal with the token is unable to be used on another mobile device. This helps render any stolen data unforgeable and useless.
- Two-factor authentication: This provides an additional layer to guard against mobile payment fraud by utilising two independent mechanisms for authentication. Among the common credentials used are something the user knows (such as a password), something physical that the user has (such as a payment card or phone) and a biometric such as a fingerprint, voice print or facial recognition.
If a mobile device containing a mobile wallet is lost, the mobile device can be remotely erased. And since the consumer's payment card information is not on the mobile device, the payment cards do not need to be replaced.
Like consumers, merchants stand to benefit from mobile payments in many instances.
"A key benefit for merchants is that enhanced security should lower fraud and thereby lower costs," the report states.
It likewise notes that integrating mobile payments into a merchant's business creates opportunities for more robust customer loyalty programs and allows for purchases in circumstances when customers do not have access to their physical payment card.
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