Mobile payments: Introduction

The proliferation of smart phones and the constant race (by manufacturers) to integrate the latest technology to smart devices has naturally led to the current developments in mobile payment. The boom in mobile payment has been forecast to continue and it’s expected that by 2014, £1 out of every £7 spent would have been through mobile payment.

Mobile payment has already had an unexpected boom in sub-Saharan Africa, with mobile payment services in that region making up 53% of all live mobile payment services in the world; considering the pace at which technology tends to arrive in that part of the world, this is really an eye-opener that can predict the future of mobile payment in other areas of the planet, too. The mobile payment services used in Africa – although they have a lot of traffic, don’t necessarily utilise the newest technology available like NFC.

NFC (near field communication) is a feature on the majority of the latest smart devices; it’s a wireless technology that enables devices within 10cm of each other to communicate. The consequence of NFC chips being added to our smart devices is that it gives software developers the opportunity to digitise our wallets. Our phones turn into virtual repositories of cash, debit cards and cheques.

The key challenges that would affect the growth of this technology in the future are: is it easier that cash/debit/credit card? What are security challenges? How much money is involved in the transaction? These questions do not stand isolated from each other – they are inextricably linked.

In Africa, the security challenges are still vast and concerning, but the ease of use of mobile payment and the small sums of money mainly involved in the transaction has helped to overcome the security concerns. This isn’t the same for European countries.

Security Challenges: The race to innovation

Anyone who has paid any attention to the news within the last year would have noticed the increased and serious threat from cyber terrorists; especially groups successfully managed to hack into companies as big as Apple and Sony. This creates a lot of doubts in people’s mind that has actually slowed down the growth of mobile payment in western countries.

Incidentally, this is great news for those in the business of testing as mobile payment providers know that developing a great solution that guarantees top level user experience AND security today will not necessarily provide any level of security tomorrow. There is a need for constant innovation, and proper implementation of new ideas is critical for them to maintain security and consumer confidence. Hackers or cyber terrorists are forever innovating to get past the latest security gates, so organisations that offer mobile payment have to innovate even quicker to stay ahead.

Testers need to get conversant with new security ideas and new technologies in order to remain relevant. Mobile payment providers transmit encrypted information between devices which is quite difficult to decipher – but not impossible. However, the main problem is with the authentication between both parties and the user’s profile. Better authentication mechanisms have to be introduced constantly, while the ability to clone phones and introduce malware that reside on a user’s phone collecting data also creates another challenge for smart phone security testers.

A unique user profile can be created for customers based on the IP, GPS, WI-FI data and transaction history; these could be used to isolate fraudulent data but also create another security challenge in terms of the storage of this data; as hackers are also known to target repositories of stored user data; either localised or cloud.

Mobile payment is here to stay and this creates a forever constant security challenge for providers and testers but also a business opportunity for the security firms (both in test and development).

Find out how Sogeti’s Application Security Testing solution can help to overcome mobile payment security challenges here.


Posted in: Behaviour Driven Development, communication, Developers, Digital strategy, e-Commerce, Innovation, IT strategy, mobile applications, mobile testing, Open Innovation, privacy, Security, Sogeti Studio, Technology Outlook      
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