Mobile technology can give you the power do a wide variety of things anywhere and anytime: text, Web surf and pay bills. While technology is wonderful because it improves convenience, it can also make people more vulnerable. A good example is mobile banking using your smartphone.

Completing financial transactions anywhere could save you a lot of time, but are the networks safe? Are Apple Pay, Venmo, and Square Cash gateways to identity theft?

Will Smartphones Replace Wallets?

Credit cards have advanced the way that money is used in modern society dramatically. To allay fears, banks have promised to cancel any unauthorized charges on the “plastic money.”

Smartphones have given users powerful machines to connect, communicate and complete tasks in the palm of their hand. But is the smartphone culture fully compatible with the banking industry?

Apple Pay, Venmo and Square Cash each offer their own intriguing formula for encouraging consumers to migrate to mobile banking. So far, the experts have predicted that the profit potential is astronomical. Still, entrepreneurs must pass through the following steps to get the public to accept new technology: Ignorance, Doubt, Mistrust.

At the present stage, the mobile money apps are trying to handle each of these three stages at the same time. Theoretically, most consumers can understand the intrinsic benefits of mobile banking, but are worried about security. With frequent media reports about identity theft, consumers might not want to try something new.

What are the things that could hurt you?

Data Breaches

Ex: Venmo

The Venmo smartphone money transfer application leverages the social media “Friends” concept of allowing you to transfer money between users. Both payer and payee must sign-up for Venmo. You can use your Venmo balance, credit card or United States bank account for payment. The PIN-protected Venmo works on both iOS or Android systems. One of the problems with this linkage is that if it is hacked, you could not only endanger yourself, but also your friends and family. Do you really want someone having access to your credit cards and Facebook page?

Misplacing Your Smartphone

Consumers have developed a natural habit of being very careful with their wallets. People only pull them out for payments. But cell phones are an everything device used for the following: Talking Texting Selfies Social Media The benefits of the smart phone might also be its Achilles Heel.

Problem: Lost Cell Phones

When consumers use their cell phones for so many purposes, they increase the chances of it being lost or stolen.

Solution: Data Swipes

Experts suggest that users should 1) PIN password-protect their smart phones and 2) Sign up for a data swipe service. While data swipes might be effective on the software, they are not effective at removing data from the hard drives.

Hackers Create New Schemes Continuously

Cyber criminals can also use phishing, man-in-the-middle or Trojan Horse malware attacks to steal your credit card information. Phishing is when a fake website pretends to be a trustworthy financial website. The Trojan Horse steals your data by taking over your operating system. Most experts warn against completing money transactions using unsecured public WiFi systems for this reason.

Ex: Simple Square Cash

Experts like the simplistic, easy-to-use Square Cash app. It has a solid dashboard and can work on iOS or Android phones. The system is only for debit cards initially, which might be a good way to minimize risk.

You don’t need an account with Square Cash to use the app. Users receive an email alert for each transaction. There is no PIN protection for Square Cash.

Unfortunately, even Square Cash data can be stolen from the air using high-tech scanners. Police departments use scanners that can accumulate cell phone passwords, texts and data. What if cyber criminals got a hold of the same technology?

As the mobile banking sector tries to improve knowledge, hope and faith in mobile banking smart phone technology, they continue to run into problems with identity theft. Cyber criminals seem to understand the ease of stealing money from smart phones. Consumers still need to develop better habits and security provisions to prevent Apple Pay, Venmo and Square Cash from becoming gateways to identity theft.

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One Response to “Apple Pay, Venmo, and Square Cash: A GateWay to Identity Theft?”

  1. The Lord of Up says:

    Some issues with this article:
    This article does point out some major vulnerabilities in mobile payment technologies. It also gives three potential problems with them But while it’s titled “Apple Pay, Venmo, and Square Cash: A GateWay to Identity Theft?”, it COMPLETELY ignores Apple.

    First, Apple lets iCloud users not only find lost iOS devices, but remotely stop Apple Pay payments or even remotely wipe the device(s) in question if needed. And while this article cites problems with data breaches (“Do you really want someone having access to your credit cards and Facebook page?”), Apple’s Apple Pay deals with that issue by sending a unique one-time token, not any credit card or personal info. Users’ Mobile payment info (credit/debit card numbers, etc.) isn’t stored on the iOS device, only that device’s unique Device Account Number, encrypted, and securely stored in the Secure Element, a dedicated chip.

    Lastly, the third problem given, “Hackers Create New Schemes Continuously”, is a problem with ALL money and means of transactions. Cash can be stolen or counterfeited. Checks can be forged. Most US credit cards just store their data on an easily-read (including by hackers) magnetic strip. US banks and credit card companies are shifting to cards with embedded microchips which are more secure and easier to use, but have their own set of problems and vulnerabilities. Bitcoins can be stolen if a hacker gains access to someone’s Wallet.

    There’s always tradeoffs in Confidentiality, Accessibility/Usability, and Confidentiality…

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