Use Twisted

Editor’s note: This will be the final installment of our Commerce Weekly series.

Mobile payments security, privacy concerns rise; Amazon may have a solution

The race is on to democratize mobile payments, to create a solution that improves the payment experience for consumers and merchants to the extent that it will replace traditional payment methods. Some experts, however, are concerned that technology developments are failing to address increasing concerns with security and privacy.

Kirk Ladendorf reports this week that smartphone security software company NQ Mobile noted a rise in worldwide phone malware threats from 24,000 in 2011 to 65,000 in 2012. In an interview with Ladendorf, Gavin Kim, chief commercial officer at NQ Mobile, warned that “[s]martphone sales are booming, and they are becoming a much more targeted device by hackers.”

Brent Warrington, CEO of online and mobile payment company SecureNet, disagreed, telling Ladendorf that he’s “comfortable and confident in the level of security of [payment] transactions” through his company, noting that the transaction information is “encrypted from end to end.”

While security concerns may be getting addressed, Ladendorf says that privacy advocates don’t see the same attention being given to privacy concerns and the “potential misuse of growing mountains of electronic data tied to the spending patterns of individual consumers.” Ladendorf notes that the same advances that make mobile payments more enjoyable and convenient also make it easier for companies to mine consumer data. He quotes from a McClatchy newspaper interview with Jeff Chester, executive director of the Center for Digital Democracy, in which Chester said, “[Mobile payment] is about exposing your financial behavior to a daisy chain of financial and other marketers who have a very detailed understanding of where you are, how you spend your time and what you buy.”

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