07 December 2016

FUTURE TRENDS - The Growing Importance of Mobile Currency

The role of cash in the future is debatable, but the growing importance of mobile currency is not.

Whether paying with a debit card, accepting an e-transfer, or being paid by direct deposit, mobile banking in its many forms is a critical part of modern life.

And with the development of technologies like Square for accepting credit and debit payments on a smartphone, and mobile check deposits, mobile banking is only continuing to grow in relevance and market dominance.

Mobile currency is convenient. It can cut down on paper waste, allows money to flow more quickly, and it’s become an expected part of the consumer experience. 

Although some businesses still prefer cash because of the processing fees charged by credit card companies, debit remains a close second for preference and price.

For the average user, mobile banking and digital finances are an easy and logical choice. The world is increasingly set up for digital currency, and for many people their smartphone is a constant companion.

But how secure is mobile currency?

Malware, app and device security weaknesses, and prevalent identity theft all present threats to mobile security.

And the vast network of Internet of Things connected devices means that even operating on a secure device can’t guarantee security, because that secure device may be sharing information with an unsecure device.

It’s a complex issue, and information security is made all the more challenging and complicated due to the fact that the problems can’t be solved in the same way as, say, structural engineering.

No matter how secure a device is, there are humans on the other end looking to exploit it. And humans are resourceful – they’ll find a way in.  

For businesses, digital finances are a necessity and security breaches are unfortunately commonplace.

Although some of these breaches make the news, many others don’t. Consumers are often issued a new card due to a security breach, and never find out which retailer was compromised.

This makes it very difficult for consumers to control the security of their digital finances, and means that the best defense is a watchful eye on credit card and bank statements.

New services that text credit card holders whenever a transaction occurs make it easier to pay attention.

Credit card balance insurance, which promises to protect consumers from fraudulent charges, is not always worth the high cost.

The confidentiality agreements between retailers and credit card companies mean that security breaches may not impact the business’s reputation, but the cost of digital security is significant and growing.

According to a 2016 study by Kapersky Lab, the cost a data breach for a small or medium business is an estimated $86.5k and $861k for larger enterprises.

Mobile currency is different than cryptocurrency, such as Bitcoin, because it uses mobile technology to change the way money moves, rather than changing the way money is generated or used.

Cryptocurrency presents its own benefits and challenges, and although cryptocurrency is laying a foundation to go mainstream, it may be years before the average consumer is paying for groceries with alt-coins.

But the technology being developed for cryptocurrency may make its way into daily mobile finances much sooner.

Kenya, consistently ahead of the curve when it comes to mobile currency, hosted the Afrikoin conference in 2015, with a focus on incorporating new security and accessibility features, such as blockchain, without moving fully into the alt-coin market.

Shifts like these are already happening inside big banks, and will only become more commonplace.

About Tiffany Sostar:
Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

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