With the advent of Samsung Pay alongside Apple Pay, the rate of mobile payment uptake will be of particular interest to the payment, retail and financial industries as the 2015 holiday shopping season continues. Yet, with this desire to see mobile payments take off, recent research from ISACA suggests that an overwhelming number of cybersecurity experts (87 percent) expect to see a boost in mobile payment-related cybersecurity breaches over the next year. Disturbingly, the report indicates that these experts are resigned to breaches as an acceptable trade-off for greater adoption rates.
It’s not all doom and gloom, though. One of the great advantages of mobile payments is that they bring more security into the payment landscape through the use of dynamic data for transactions rather than the static data that payment systems used to deal with. The security that has been implemented, and the flexibility offered by mobile payments, introduces more options to make transactions unique and more secure.
We are finishing the year with the U.S. having just begun the EMV transition. There are several factors at play right now: consumers are still trying to get used to EMV, and merchants are still trying to get used to EMV and mobile. I am sure many merchants have a puzzled look when consumers hold their Samsung devices with LoopPay technology up to their magnetic stripe only terminals to make a payment.
However, I think that one of the most interesting aspects for mobile in the holiday season is in-app payments and its contribution to an increase in on-line purchasing. Consumers can buy gifts using their mobile device and pay directly from the app using cards in their mobile wallet (e.g. Apple Pay). We should start seeing a lot more simplicity in purchasing from a consumer perspective. Uber is an example of mobile simplicity. They have integrated payments in their app with a choice of payment methods. Consumers schedule their rides and go. There is no payment process to go through with an Uber driver; everything is already in place and payment is automatically made. The simplicity that mobile can bring into the equation for purchasing either goods or services is sure to have a positive impact on the holiday season.
It will be interesting to see if mobile technology will help simplify the purchasing cycle from a sales and check-out perspective at a brick-and-mortar store. If a retailer is using mobile devices for payment acceptance, or perhaps you have a mobile app for that retailer, the mobile device could be used to handle the payment right there in the store – no more waiting in line. This gives merchants greater flexibility in assisting customers and better leveraging the standard seasonal staff additions. In-store purchases could be handled by roaming check-out clerks supplementing regular check-out stations.
As consumers choose mobile payments more often this season, hackers will be on high alert, looking for ways to commit fraud. Both mobile and EMV have given merchants much greater security. It will be interesting to see how the fraud numbers are affected over the holiday season with the additional security of EMV and mobile and the positive impact they should bring to merchants and consumers alike.