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How to Secure Online Payments on Mobile Devices

How to Secure Online Payments on Mobile Devices

Mobile payments
are gradually squeezing out cash and credit cards.

And, with years to come, the preference for online payments on mobile devices is only expected to grow.

According to the report
by eMarketer, by 2023, 42.2% of people worldwide will be using
mobile payments, and only approximately 6% will use cash:

Image credit: eMarketer

Younger
generations support this shift, as both millennials and Gen Z-ers speak in
favor of online payments on mobile devices.

Yet, today, there
is still a certain distrust in mobile payments. And the security of mobile
payments remains the main concern. Reportedly,
38% of consumers say that mobile payments are somewhat protected, while the
other 38% think they are poorly protected.

Are Mobile Payment Security Concerns
Far-Fetched?

Unfortunately, no.

Mobile payment
methods are still vulnerable, although companies invest millions of dollars
into improving the security of online payments on mobile devices.

One of the latest
data security breaches happened last year with DoorDash, an on-demand prepared
food delivery service from San-Francisco. Breached data included personal
information and contact details from customers, and order history, and mobile
payment details.

As a result, this
data breach cost affected
4.9 merchants and consumers.

Thus, as the
probability of mobile payment security threats is still high, companies keep
looking for technologies that will help mobile users be more confident to pay
with their devices.

However, there are
some things you can do today already to somewhat secure online payments on
mobile devices.

Let’s take a look.

1. Two-Step Authentication

Also known as the
2FA method (two-factor authentication), this option is a good fit for those who
make regular payments with mobile devices.

Two-step
authentication is a confirmation method, which requires a customer to provide
additional registered data in response when a customer makes payment.

Two-step
authentication can include the following mechanisms:

  • a
    customer receives a call on their phone to confirm the transaction
  • a
    customer receives a text message with a code to proceed with the transaction
  • a
    customer is required to provide biometric data like a fingerprint, voice or
    facial recognition

Two-step
authentication is the most common method to secure online payments on mobile
devices. It is used for mobile wallets as well as to secure the VoIP
getaway used by ‘pay-as-you-go’ services.

Two-step
authentication, however, is not a one-size-fits-all method.

It is important to
implement those authentication steps that fit the transaction value, type of
mobile device, and type of payments (new or regular).

Other than that,
two-step authentication has proven to be one of the trustworthy methods to
secure online payments on mobile devices.

2. Secure HTTPS Connection

In case your
customers make purchases from mobile devices, you need to provide a secure
connection to make these online payments safe.

But while securing
the Wi-Fi connection is the task for your customers and their internet
provides, you can also do your part to secure online payments through your
website.

The method that
has proven to be the most effective is switching to the HTTPS protocol.

How can it help
secure online payments on mobile devices?

  • Cutting the middleman. Any data shared between a mobile device
    and your server remains private, and no other party can get access to it.
  • Better encryption. HTTPS uses Transport Layer Security – a
    cryptographic protocol that provides better communication security than its
    predecessor SSL, used in HTTP.
  • Confident customers. Google warns its users about every
    website’s level of security. Today, HTTPS is no longer a choice, it’s a
    requirement from Google that impacts not only search results but your traffic
    and conversions as well.

Since half of the
traffic today comes from mobile devices, e-commerce businesses and other
companies, who deal with online payments, should consider improving the
security of their websites.

3. Tokenization of Mobile Payments

Breaches of
personal data are among the biggest
mobile payment security concerns. And one of the novel methods to
tackle this problem is mobile payment tokenization.

Tokenization
digitizes a physical payment card, and, using tokens, turns it into several
digital payment means.

This method can be
helpful for online payment systems similar to Google Pay that digitize a
physical credit card and encrypt the personal data that it holds using tokens.

How does it work
exactly?

Tokenization is
used to convert the primary account number (PAN) into tokens. When the user is
ready to make the transaction through a mobile device, the token releases
payment credentials to the network.

Before the
transaction is complete, the Tokenization platform verifies the validity of the
payment. Thus, tokenization adds an extra level of security to online payments
on mobile devices.

Over to You

Although mobile
payments today are more secure than they were in the past, there are still a
lot of security concerns.

And while the
technology is far from its perfect state, there are still some steps you can do
to make online payments on mobile devices more secure. You can either turn to
more traditional options like two-step authentication and the HTTPS protocol or
try tokenization that provides more security to payment data.

Either way, the confidence and security of your customers when it comes to mobile payments depends largely on you.

Ryan is a passionate writer who likes sharing his
thoughts and experiences with the readers. Currently, he works as a digital
marketing specialis, you can check his website
here. He likes everything related to traveling and new countries

The post How to Secure Online Payments on Mobile Devices appeared first on PaymentsJournal.

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