Four FDIC executives have published a paper on the security issues unique to the new generation of mobile payment solutions. The executives found that, although the formats are new and modern, most mobile payment solutions being developed today already are accounted for in established regulations and requirements. Financial institutions already are familiar with the major risks of mobile payments because most of those payment types ultimately settle transactions using consumers’ bank account or card information.
They did, however, note a few risks. For example, a major risk of mobile payments is that many solutions are provided by non-banking entities unfamiliar with the necessary measures required to ensure transaction security, and most solutions require cooperation between multiple players.
Noted the FDIC:
“Unlike most banking products that allow institutions to control much of the interaction, mobile payments require the coordinated and secure exchange of payment information among several unrelated entities.”
One of the more interesting points the study addressed was FDIC’s prediction that no form of mobile payment would ever become truly dominant. Generally, the debate takes the format of whether NFC or QR codes will win out in the end. One person describes the technological benefits of NFC, the other explains how much more cost effective and wide reaching QR codes have the potential to be. For some reason, it is rarely ever concluded that the transactions that require advanced technology will use an NFC wallet, and those that get more benefit from using an inexpensive solution will stick with QR codes.
While there are plenty of good arguments that either one or the other option is advantageous enough to overtake the mobile payments market entirely, the idea that the two technologies can coexist indefinitely is worth consideration as well.
Click here to read more from the FDIC.