The security concerns in digital payment system

          Although all different kinds of digital payments make our life much easier, there are still many problems about it. The main drawbacks are concerns over privacy and the possibility of identity theft. Cyber crime is a major threat to the US payments systems. Online databases can be hacked and important information can be stolen. And if that happens, it can be a very serous financial loss.

          Over the past few years, some people experienced a card cancellation due to a data breach. 15% consumers saw fraudulent charges to their account because of a stolen account number. Such events have a significant impact on consumer attitudes. They are caring their concerns into the emerging world of mobile payments. Generally, emerging payment forms are less secure than traditional ones, and research shows NFC payments are the least secure method.

          The truth is doubts about safety issues are the key barrier to all different kinds of digital payments. According to the article Top Ten Payment Trends To Watch, “63% of consumers said they believe that mobile phone signals are easily intercepted by criminals, and 39% believe that payment cards can be read through a wallet”.

          To prevent these crimes from happening, the credit card companies such as Visa and MasterCard cooperated to develop the secure EMV chip, which is embedded in credit cards. EMV chip card transactions improve security against fraud compared to magnetic stripe card transactions that rely on the holder's signature and visual inspection of the card to check for features. Further developments include the Chip Authentication Program where banks give customers hand-held card readers to perform online secure transactions.

 

Sources:

http://www.smartcardalliance.org/pages/publications-emv-faq

http://www.vantiv.com/Insights/Vantiv-Insights/Insights-Resources/Research-Papers/Vantiv-Insights-Top-10-Payment-Trends-to-Watch-In-2013