So after all of the exciting news about mobile payments stuff happening all over the place, there seems to have been a mini-lashback that happened this week with multiple sources all proclaiming the evils of mobile payments.
A recent study from Juniper Research indicated that in NFC mobile payments alone, there will be about ~$110 billion in opportunity because by 2014, they claim, one in every six mobile subscribers will have an NFC-enabled device. This latest forecasts basically amounts to at least 20% of the smartphones by 2014 supporting NFC, which equivalates (that's not a word, but it should be) to ~300 million phones.
Enter the doomsday seekers. An article was featured in NetworkWorld this week, entitled "Mobile Payments: Don't Buy Into It".In this article, they claim that security is their main issue, and that mobile payments "are a disaster waiting to happen". Moreover, they claim that from a merchant perspective, encouraging more people to use essentially what amounts to a credit/debit card isn't in the merchant's best interest because of interchange fees. As for evidence, they claim that hacking is now done by "organized gangs" and that Google's Android platform is particularly vulnerable due to the open source nature of their OS, they have less control over their platform than say Apple and the iOS. They also go on to site the dangers of downloading apps that may or may not be fully vetted for security/ apps that are falsely marketed as payment apps that actually aren't. Not buying their article- seems too fluffy to convince me.
MSN Money posted an article this week called "Mobile Payments: Convenience at a Cost?". In this article, they claim that there are a lot of risks that come along with the "magic" of mobile payments, only one of which is the very nascent stage that we are currently in with controlling/securitizing the NFC technology. They even brought up a Consumers Union report. Okay, I'm half-way convinced.
SFGate reprinted an article from Neural Technologies where they claim that "Mobile Payments- Fraud Waiting to Happen". (I would like to share that I am instantly skeptical of any source that can't properly use verbs in titles.) After the redirect, it takes you to their website where they ask you to give your information to request a "free (no obligation) copy of the report". Their page is filled with marketing information for their top of the line fraud management services. Not convinced.
Seems like a lot of people just wanting attention by saying something to incentivize outrage. Mobile payments does have some drawbacks, security is definitely going to be one of them, but why would you publish fluffy pieces just for web traffic? Bah! Waste of time...
In my mind, security will definitely be a concern because although there are PCI standards for processing, we are at the very beginning stages of some of these new technologies. Similar to any major invention (the car, mainstream drugs, the internet, etc.) the technology came first, and we didn't know what we didn't know- so the laws, the restrictions and the limits were created later. Similarly, no one fully knows yet what the value and the opportunities are for technologies like NFC, QR codes, radio waves and sound-based communication methods (no seriously, there is a way for some devices to emit high pitched beeps to communicate with a receiving device) or even light based methods (replacing electrons in computer processing with photons that can be encoded through different patterns or colors to "hold" more information-see University of Bristol new research). And, although it makes everyone uneasy, we won't know until we actually push those pilots out there. The good thing is, the industry is pretty good about hedging their bets by testing with internal hackers in cases like these because they don't want anything deterring them from making money! So, I rest (a bit) easier knowing that any new technologies I adopt have been tested as best as possible, and that any potential hacker is only a few hours ahead of an internal hacker at my favorite mega issuers/ mega banks.
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