Mobile payments pick up steam through stronger authentication
October 1, 2013

Mobile payments remain a potentially important step in how consumers purchase goods and services, but they are currently being held back by two significants roadblocks: security and complexity. Reporting on a recent Sap study of 12,400 adults from 17 countries, Business News Daily highlighted some worldwide consumer concerns about the technology.

Many respondents to the survey said that they were worried mobile payment plans could expose their personal information and bank accounts, and that entering all of that data into a mobile device can be a hassle. 

The news provider also noted that many smartphone owners are concerned about losing their Internet connection while paying for goods, which could prevent them from completing the transaction. While this would not be an issue with all versions of mobile wallets, it is a perception that organizations may have to overcome among consumers. Furthermore, convincing some Americans that their devices are useful for more than talking and texting may be another obstacle, as the Sap study found that only 38 percent usually use their phone for other reasons. Globally this is less of an issue, though, with 63 percent utilizing the multifunctionality of smartphone technology. 

Among current users, mobile wallets are considered flexible, fast and convenient, Business News Daily mentioned. It added that so long as they are simple, safe and effective, U.S. consumers should be open to their use. That said, interest in the technology reached nearly 100 percent among study participants from India, China, Saudi Arabia and India, while more than half of U.S. consumers thought it will eventually be important. 

Standardization lags behind
Another issue affecting their adoption is that there are multiple organizations developing their own mobile payment apps and they are not always standardized. Google, PayPal and some phone service providers are creating their own versions of the technology. Apple is, too, but unlike other smartphone manufacturers, the company has not provided the near-field-communication (NFC) capability available from other companies. This combined with the iPhone's popularity has stifled some efforts to institute NFC readers in some stores.

Reducing complexity while increasing security
However, SecureKey is bypassing many of the problems currently impeding mobile payment adoption, PaymentsSource recently highlighted. As security and privacy are two major issues holding the technology back now, SecureKey's device ID solution will include authentication that encrypts data during transactions and uses "bring your own credentials" (BYOC) technology that identifies users through their smartphone and pre-existing banking account details. 

In order to buy products and services, PaymentsSource noted that Securekey's system employs a QR reader to scan and confirm payments, which creates the easy, convenient kind of payment necessary for widespread consumer adoption.

"Electronic commerce has to be frictionless," said David Mahdi, director of product marketing at SecureKey, to PaymentsSource. "People will simply use another way to pay if the authentication is too hard."

The device ID also enhances privacy by preventing banks from knowing what users are buying with their mobile wallets. Even as other services try to gain more personal details about their consumers, SecureKey has focused on providing people with greater anonymity, which is part of the reason why it does not use social media credentials as other companies' versions do.