Thursday, October 4, 2012

Mobile Banking Replacing Your Wallet

We are constantly taking advantage of apps on our phones to ease the stress that comes with paying bills or checking online balance statements. More and more people are starting to use their phones to pay bills, purchase items, or use mobile gift cards to make purchases. Security expert, Eddie Lee, has put a completely different perspective on the convenience of these apps in our everyday lives.

Lee has created an app where he is able to steal credit card information just by waiving his phone over the wallet in someone’s back pocket. He can then go into any store and tap his phone at the register and make a purchase. The point of this experimental app is to catch the weaknesses in wireless payment plans.

The video below discusses the opportunities that come with having such a powerful device. I found most interesting the idea that you can go into a coffee store, for example, and your phone will tell you how much you have spent so far this month on coffee, and suggest whether or not you should proceed with the purchase. The video also mentioned the method of transactions that is pointed out as a major flaw in Lee’s experimental app. The video talks about NFC (Near Field Communication). The NFC is where you can tap your phone at the register to make a purchase. Although this seems to be of much convenience, we have to think back to Lee’s observation and how he was able to use his phone to steal a credit card, then tap his phone at any store using the stolen card to make a purchase. While the video does a great job explaining the benefits to such a revolution in banking technology, we have to still consider the drawbacks.

                                                                                                                                                   The BusinessWeek article about Lee’s experimental app continues to say, “Fraud will account for 1.5 percent of all mobile payment transactions in four to five years. Criminals can access a mobile wallet by tricking its owner into downloading a piece of malicious code. Malware attacks on U.S. smartphones have risen 18 percent since 2011.” These numbers are not showing positive feedback to these new online banking apps.                                                                                                               
                                                                                                                                                      All of these factors are affecting the future of mobile wallets. Having all of your information on your phone seems a bit much. There are still a lot of factors that need to be considered and tweaks to the online banking system that needs to be made before we all jump into this new way of banking. The idea that someone was able to come up with an app that can easily steal your credit card information is a serious factor in all this technology.
                                                                                                                                                                    I believe these banking apps will provide a great opportunity to further advances in the way technology plays a role in our everyday lives. I just think we need to take precautions when these apps are dealing with our valuable and personal information.



  1. In today’s society, there are constant advancements in technology to make life “more convenient” on a daily basis. However, the more I read about this new technology, the more I believe it is hurting our society. Yes, apps on cell phones are a great advancement. However, some of the uses of these apps can become dangerous. I believe using a mobile banking app is reasonable; one that has security questions and asks you to sign in each time you open it. But I don’t agree with using your phone at a register to make a purchase.

    First of all, I think this is lazy on people’s part to not be able to open their wallet and pull out money or a credit card. These forms of payment have sufficiently worked for years on end and do not need to be changed. Second, I think it is extremely risky to keep important financial statements, documents, and purchases on a cell phone. People are always losing and breaking cell phones today. One could argue that just like cell phones, wallets or purses are lost or stolen as well. However, research shows that about 1,000 wallets and purses get stolen every two minutes in the United States, which equates to 1.44 million wallets or purses daily. On the other hand, there were 9 million smart phones lost last year.

    A test was recently done by Symantec security software. “Symantec found that in the vast majority of cases -- more than 95% -- the people who found these missing cell phones tried to access personal or sensitive information, or services such as online banking or e-mail.” Symantec is now working on selling mobile security software which can help users track the location of a lost phone and lock it or erase all of the data. I believe this software would be extremely beneficial to protect personal information and make the use of mobile apps safer and more efficient.

    The fact that Lee created an app where he could steal credit card information by waiving his phone over someone’s wallet is extremely scary. Not only does this deal with hacking into personal information on someone’s phone, but it involves someone’s physical wallet and credit cards as well. It is fortunate that this was discovered by someone who was not actually trying to steal the information. However, now that this has been recognized and proven to be effective, it is the responsibility of mobile networks to prevent this process and to fix this flaw in their wireless payment plans. Mobile networks should utilize security software like that of Symantec to increase the protection and safety of cell phone user information. People also need to become more aware that they are under more threat than they think. People need to take more precaution in both their wallets and cell phones to protect personal information. They must be aware of where their belongings are in public and must be aware of who they come into contact with to protect themselves as much as possible.

  2. Cell phones are become the answer to everything. The new invention of Serie can talk to people, there are navigation apps, and just about anything you can think of. Recently, “just about anything you can think of” was proven. Now people have the ability to purchase items as well as pay bills on their cell phones.

    The technology aspect is amazing. People do not need to carry around purses or wallets if they do not want to, because everything they need for transactions are in their phone. This makes me thing how lazy people have become. As technology increases, people are less responsible for common daily activities like pulling out their wallet to pay for a cup of coffee.

    Thank also makes me wonder what happens if someone looses their phone. Not only can someone sell or keep your phone but they can also have access to all of your credit card information. It is as if they stole your credit card and phone simultaneously.

    As if that is not bad enough, now according to this article, Eddie Lee has proven that it is possible to steal credit card information from another’s phone by simply waving one cell phone to another. In another article, “Firms find security Holes in mobile banking apps,” it was stated that “…providing security most of the time is simply not good enough. For mobile app providers, there are no shortcuts to protecting customers' data.” Companies are aware that cell phone banking is very dangerous and needs to have extreme security, but the question is if they will implement it. In order for this to be a success they need to go above and beyond to secure customer’s information.

    Personally I would never succumb to cell phone banking. Yes it is convenient, but it is not worth the risk. I would rather swipe my card every time I need to purchase something or visit an ATM/bank for transaction purposes. It may be old fashion, but it is definitely safer.

  3. Amanda, I am amazed after reading this article. After reading through your thoughts and viewing the video, I am split on whether I think this technology will be more beneficial or harmful for our world.

    Let’s start with the aspects of this technology that I think are advantageous. One thing that I think flies under the radar as being extremely helpful is how the technology has the ability to keep track of how much you have spent at a certain place or on a particular item. The video reveals the example at the coffee shop. Although coffee seems like a minor expense, it adds up quickly for consumers, especially those who are daily drinkers. This technology will allow these types of consumers to realize how much they are actually spending. I feel that this is important because with credit or debit cards, you may not realize how much you are spending until you view the statement. By knowing exactly how much you have spent right at the register, people will be able to budget their money more effectively, even with something as small as coffee.

    The second advantage of this technology that stood out to me was that it has the potential to eventually take away the need for a wallet. Take a minute to think about all the important things you keep in your wallet. Now think about the terrifying times where you have misplaced it or lost it with all that important stuff. With this technology, everything from a credit card to identification can be stored in a smartphone. If your phone basically takes over the need for a wallet…that is one less thing you have to keep track of. This might again seem like a minor benefit, but it provides convenience, and that’s what customers pay for.

    On the other hand, the disadvantage mentioned about this technology was the threat of increased fraud. Although there are several advantages, I believe that this one downfall alone could prevent this technology from ever exploding. I thought the statistic given about fraud accounting for 1.5 percent of all mobile payment transactions in four to five years is jaw dropping. How can we possibly move on with a technology that is this vulnerable? I recently did a post on RFID technology and facial recognition that touched on the same issue. Both technologies provided and abundance of benefits, but the privacy concerns alone might be enough to prevent these technologies from being the next big thing.

    Overall, as I have said numerous times, the ability of this technology is incredible. I just feel that the risk it presents outweighs the benefits at this time. As long as these privacy issues remain a concern, I would struggle to convert to using this kind of technology.

  4. Although mobile payment apps make customer’s lives easier by speeding up the shopping process and eliminating the need for bringing around a wallet, there are major security risks involved. Smartphones are even more vulnerable to getting hacked than computers since very few people have virus protection on their phones. Also, many people download apps from unknown sources which could potentially compromise their security. Mobile banking is expected to become even more vulnerable to attacks according to Businessweek.

    There are many potential risks involved with mobile payment and banking, but there are different ways that customers can prevent fraud. By signing up for text message alerts through the banking website, customers can be alerted every time a purchase is made. Another positive of using a phone for payment rather than a credit card is that most people always have their phone on them at all times. It is easier to notice a missing phone than a missing credit card. Also, since many smartphones are GPS enabled, it is possible to track a missing phone but one cannot track a credit card.

    Companies are developing new smartphones with more intricate security features to prevent fraud. Android’s newest mobile operating system, Ice Cream Sandwich, has a facial recognition feature to unlock the phone. As voice recognition develops even more, that can be used as an added safety feature.

    Personally, until smartphones have more security features in place, I would not use my phone as a form of payment. To me, the convenience is not worth the risk of fraud.


  5. According to a recent Unisys Security Index survey, it is said that “credit card theft is the number one fear of Americans.” Approximately 11.1 million people have to face this dilemma every year. By creating apps on our smartphones where we can pay our bills, check our credit card information and make purchases with all in one single device is a breakthrough for technology.

    Americans are always looking for the easier way out, as well as, the quickest way for things to get done. Apparently it would be too much work for someone to carry around a wallet with their credit cards in it. This new technology could work against people though. How many people a day do you think lose their cell phones? According to USA Today, “Last year, Lookout's app located 9 million lost smartphones, or one phone every 3.5 seconds.” With all your credit card information, as well as your banking statements being directly linked to your phone, this could be a major problem for someone. This is why it is dangerous for someone to put every piece of important information into one device because if that is found, someone could crack all your information. This will lead to a major spike in identity theft.

    I am registered with Bank of America, and every time that I try to access my banking information on my iphone app, BOA requires me to login and use a secure site key. This sight key is individual to the user and if it does not appear, you are immediately flagged that something is wrong. Bank of America makes it mandatory that my session times out after only a few minutes. This is beneficial to me because if I were to lose my phone, by the time someone found it and tried to access my accounts, I would already have been logged out.

    I believe that with technology advancing, people just become more and more lazy. People need to realize that technology is not flawless and that they still need to be aware of all their actions and the consequences that could occur. If people are knowledgeable that they need to always be on their toes when it comes to credit card theft, then the likelihood of their accounts being hacked will decrease.

  6. This was a very interesting read, and it is becoming clear than one day everyone will be walking around with a smartphone. If this is what it comes to, I see no reason to not make them a “mobile wallet.” While the concerns are valid, I feel like this technology is still in the development phase. While someone can easily steal information from smartphones by just getting near it, I feel like this is a flaw that can be easily remedied. By having more advanced security on the phones or by adding a necessary acknowledgement to the owner for every transaction, these thieves can be stopped from taking information. I’m sure there are more advanced techniques that can be used to stop this, but it does not seem like it should be that big of an issue. I feel that the same security threats are there with credit and debit cards, but there are even more technologies out there to steal from them. With this mobile wallet banking, the threats haven’t arrived in full force yet, so I see this having a lot of promise.

    A huge perk I can see coming from this mobile wallet is the ability to protect those who lose their phones. If someone today loses their wallet, they need to find all of their credit card information and call the credit card companies to make sure the cards are cancelled, they need to go to the DMV to get a new driver’s license, and just do much more frantic running around to make sure that they everything is secure. With this, I could see it being much easier. If a phone is lost, one could just call up the provider and cancel the connection on the phone. Maybe there could be a way to have the service provider contact the credit card companies to do the cancellations for the customer who lost the phone. There are more options that make this technology more appealing in my opinion for someone who is forgetful (like myself).

    One last implication I see coming from this technology is the obsolescence of bank tellers. As if the ATM wasn’t bad enough, this service can allow customers to ask a bank questions. While the questions are most likely very simple now, in the future as the database of past questions increases in volume, there will be no need for bank tellers. One could just ask the mobile wallet a question and quickly get an answer for them. No more going to the bank teller to ask simple banking questions, all the answer will be provided in the palm of the hand of each customer. I am excited to have this technology because trips to my hometown bank are just too inconvenient, and while mobile banking helps, this could make everything a little bit easier.