Rush to Develop Mobile Wallet ‘at Expense of Security’

Since the first announcement of mobile wallet products in early 2011, there has been a rush for mobile network operators, banks, phone manufacturers and retailers to join the world of near field communication (NFC) contactless and purchase-to-pay (P2P) payments.

However, “the rush to grab a share of the market” has led to compromised security, highlighting the need for the industry to find a robust security solution, claims Pat Carroll, chief executive officer (CEO) of telecommunications-based fraud prevention specialist ValidSoft.

Speaking at the Cartes conference in Paris, Carroll outlined the opportunity that mobile payments and banking provide for proximity correlation, invisible layers and voice-based authentication. He also spoke of the scope for including a ‘trust’ factor – a protected channel that is created in real time and exists only for the duration of that transaction.

“The goal should always be to make enrolment, activations and transactions safe, but at the same time not to compromise the customer experience with overly complicated secured procedures,” said Carroll. “There is a delicate balance to be met if the mobile wallet is to be a secured as well as a commercial success.”

“The way to a European standard for the mobile wallet is a test of endurance rather than a sprint. The opportunities that will be generated through the development of mobile wallets are immense – it’s not just a case of racing headlong in pursuit of quick market share.”

According to the ‘Global Mobile Payments Consumer Survey June 2012’, issued by management consulting firm McKinsey, by 2013 nearly 50% of consumers will use mobile payments at least once a week and, in many cases, daily.  Technology research group Gartner has predicted that the cost of cybercrime will increase by 10% per annum through to 2016 thanks to the rise of mobile devices and mobile-based apps.

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