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Entries in Mobile Payments (3)

Wednesday
Aug152012

New Mobile Payment System Raises Security Concerns

iStockphoto/Thinkstock(NEW YORK) -- A new mobile phone payment system announced by 15 major retailers may change the way Americans pay for purchases, but security concerns could make the exchange a hard sell.

The retailers, which include 7-11, Best Buy, CVS, Publix, Walmart and 11 others, announced Tuesday that their Merchant Customer Exchange will allow customers to pay and receive deals at their stores, with more participating companies to be announced in the coming months.

The exchange hasn't released all the details of its new system, but a spokesman for the group said it will make "shopping less expensive."

The retailers account for $1 trillion sales, according to the exchange.

Other mobile payments systems allow users to input their credit card data into an app on their smart phones. Many merchants have scanners at checkouts which allow users to wave their smart phone with its identifying bar code or identification number to make purchases.

Previous breaches at the point of sale for TJ Maxx beginning in 2005 show how large and costly any problems with payment systems can be. TJ Maxx offered its affected 45.6 million customers who had their credit and debit information stolen credit monitoring and paid up to $24 million in a settlement with MasterCard. Michael's, which is a member of the new exchange, had its own security breach in 2011.

One concern is that consumers will expose their credit card data or personal information to crooks.

"Security is only as strong as the weakest link," said credit and cyber-security expert Adam Levin of Credit.com. "Humans are the weakest link. You may be able to take advantage of great deal but that requires storing information in your cell phone."

"If a cell phone is lost, or you have weak passwords, the danger is you are giving someone access to your information which they can use for themselves," Levin said.

Jeremy Mullman, a spokesman for the new exchange, said he could not get into its technical specifications at this point, but security is a "major consideration."

"We are very confident that we will have world-class security," he said.

Mullman said the new exchange is differentiated from the current mobile payments market, which include Google Wallet and Square, which is "right now very fragmented."

"We believe retailers understand shoppers better. It's their world. Those insights are built into this. We think mobile commerce has enormous potential. The solution has to be ubiquitously accepted."

Levin said the exchange is a "smart" move, but he said the credit card networks like Visa and MasterCard have the "best chance" at succeeding. "They have everything in place. It's just a matter of tinkering with their technology," he said.

Things will be easier for consumers, most likely, but Levin still has reservations, no matter who is running the show. "I always get concerned when you have the recurring question of convenience over security," he said.

Another concern is whether making it easier for consumers to pay for things will lead to financial disaster for individuals in a spending frenzy.

"During the meltdown of 2007 and 2008, there was real estate impulse buying. Everyone saw their shot at the American dream and went wild," he said. "When doing things without thinking or contemplating the ramifications, we run into trouble."

Copyright 2012 ABC News Radio

Friday
May272011

PayPal Suing Google Over Mobile Payment System

ABC News(NEW YORK) -- A battle is brewing in cyberspace between Google and Ebay's PayPal unit over the search engine's new plan for a mobile payment system that would replace the use of credit cards.

PayPal has filed a lawsuit against Google, claiming the search engine used its trade secrets to launch the new system.  The filing came after Google unveiled its Google Wallet, an app that allows shoppers to pay for purchases using their smartphones.

The lawsuit claims Google sought out Osama Bedier, who currently serves as Google's vice president of payments, after working for several years at PayPal.  During his employment there, PayPal had been developing a mobile payment system of its own.

Copryight 2011 ABC News Radio

Wednesday
Jan192011

Starbucks Begins Accepting Mobile Payments

Photo Courtesy - Starbucks(SEATTLE) -- The next time you go to Starbucks to buy a cup a coffee, just wave your cell phone at the cash register to pay for it.

The coffeehouse chain announced Wednesday customers can use a new app on their smartphones to make purchases.  The Starbucks Card Mobile app is available to Blackberry and iPhone users and works in place of a Starbucks Card after customers enter their card numbers onto the app.  The app then generates a barcode, which can be scanned at checkout.

The mobile method of payment will be available at over 7,500 Starbucks stores across the U.S., including those located in Target stores.

Copyright 2011 ABC News Radio







ABC News Radio