Enhancing Security Measures On Your Mobile Wallet Offering

The use of mobile wallets is increasing around the world. This payment solution allows people in underbanked regions to handle financial transactions with a smart device. In the United States, adoption has been slower because of consumer access to plastic credit cards. However, younger, tech-savvy consumers have embraced the technology for its convenience and security.

Mobile wallets store personal information in a digital format. This data can include credit card numbers, PINs, and loyalty program accounts. If a retailer has POS hardware equipped with NFC technology, customers can make mobile payments simply by hovering their phone near the device.

Working with sensitive information requires appropriate security measures. At a basic level, the digital wallet depends on the security features of the device. The wallet will not function unless a user unlocks their phone. Standard device security measures include fingerprint recognition, facial recognition, and passcodes.

Encryption is another typical mobile wallet security feature. The wallet sends payment information in an encrypted form, protecting user data from exposure to cybercriminals. Payment confirmations sent to the wallet also use encryption for safety.

Emerging Trends in Mobile Wallet Security

Minimizing the chances of data theft and fraud are critical concerns for every mobile wallet provider. As with any technology, criminals are constantly at work looking for weak spots and loopholes. While traditional security measures offer a layer of protection, new security features will be necessary to maintain the safety of data accessed through this technology.

  • From Fixed Card Numbers to Digital Codes

When it comes to data security, repetition is a weak link. Each time a user’s device inputs the same numbers, it increases the possibility that someone can capture them. Producing randomized numbers is a new trend in keeping mobile wallet transactions secure.

Instead of raw bank account or credit card data, the wallet produces a unique numerical code for each transaction. Even if someone copies this information, it will not apply to the next purchase. A cybercriminal’s only reward is a long list of random characters.

  • AI-Empowered Business Logic

Large financial institutions handle thousands of transactions every hour. It is impossible for a human being to investigate every interaction for fraud. However, a mobile wallet developer can build AI resources that scan transactions for anything out of the ordinary. The wallet provider can also decide how the system should respond to an unusual transaction. It might flag the interaction for further investigation, request user verification, or block the purchase altogether.

Mobile wallet providers need to walk a fine line when it comes to establishing security through business logic. Convenience is a factor that drives consumers to this technology, so a security measure that frequently blocks or slows transactions may be problematic. However, many users will appreciate the occasional request for verification that shows the wallet provider is performing due diligence.

Incorporating AI technology and machine learning tools into mobile wallet security offers an innovative solution to fraud detection. Algorithms can pick up one-time anomalies like a purchase from an unknown device or location. In addition, the software can learn a user’s purchase patterns over time, distinguishing activity that varies from the norm, such as an unusual rate of transactions.

  • Tokenization

Tokenization is another way to protect sensitive user data. In this security measure, the wallet does not store or submit raw credit card information. Instead, when a user places a card in a digital wallet, the wallet receives a security token from the card network that represents the card. A criminal cannot steal information that is not on the device.

User data does not pass from the device to POS hardware because it is not in the wallet itself. The mobile wallet presents the token to the payment site. Then, the payment processor sends it to the card network. Finally, the card network shares the relevant information for payment processing.

Tokens are specific to a device. If a user has more than one phone, the same credit card will have a different token on each one. This arrangement provides better tracking information if there is ever an issue with fraudulent purchases. It also makes it easier to track illegal activity in case of a stolen device.

  • PCI Compliance

The Payment Card Industry Security Standards Council is a group dedicated to establishing safety norms for payment processing. Since 2004, this group of card industry representatives has established standard protocols that protect customer data and prevent fraud. Any mobile wallet platform that wants broad acceptance must work must comply with the PCI Data Security Standard. Mobile wallet compliance involves several aspects of wallet development.

  • Data Isolation

Successful online attacks are rarely direct. If cybercriminals can find an access point in a less secure third-party application, they may be able to sneak into a more secure environment. PCI compliant applications must limit unnecessary third-party connections. User data must also be separate from less sensitive wallet software processes. This practice prevents backdoor access within the application.


Mobile Wallet Development Practices

A mobile wallet developer must follow industry standards for secure coding. Financial application programmers should focus on simple design. Greater complexity leaves more room for configuration errors and other vulnerabilities.

Comprehensive security testing is essential for the safety of financial applications. Mobile wallets should have several levels of defense, and developers should test each one through a threat modeling process.

Server-Side Controls

Cyberattacks are becoming more frequent and sophisticated. Even the best security measures may not fend off illegal access. At this point, the mobile wallet provider must act to prevent further damage. Server-side controls that can disable transactions across the application are necessary.

Adopting the Latest Security Measures

Mobile wallets will continue to flourish as a preferred method for mobile payments. Convenient, contactless payments streamline the checkout process as well as promote other transactions. As eWallet technology grows as an accepted form of payment, consumers will use the resource for bill payments, person-to-person transactions, and automated payments.

Mobile wallet providers must maintain security to stay competitive. Consumers expect the standards protections of encryption and biometric access. However, the expansion of cyber threats will require the incorporation of innovative security solutions.

An application that deals with financial data need careful examination to eliminate vulnerabilities. It only takes one successful cyberattack to lose consumer trust. An experienced mobile wallet development team will strengthen the weak spots and properly implement new security measures. Incorporating the latest cybersecurity features will keep mobile wallet providers and their clients safe.