Are Digital Wallets Secure?
The digital payment industry is fast transforming and continuously evolving in India. With disruptive innovations transforming the digital payments space, India is slowly moving towards a cashless economy.
Not too long ago, we dealt only in cash or cheques and were even conservative in our use of debit cards or cash machines, let alone Internet banking or shopping. But disruptions in the digital space have not only revolutionized the way we pay and manage our finances, they have also made contactless and cashless transactions the preferred choice of many among us. And, with digital wallets, Quick Response (QR) codes, near field communication (NFC) technology, sound wave systems, virtual cards and, more recently, the Unified Payment Interface, or UPI, offering top-notch secure payments options, the smartphone has become the most sought-after all-in-one device.
Demonetization has increased the digital payments market but along with it comes the added security threat. With so many options to choose from, people these days are inclined towards the e-wallets cashless transactions. They are not aware that QR codes can also be malicious. This is why scammers are now using malicious QR codes for tricking users.
In 1948 sitting on a beach N.J Woodland he came up with the idea of a Barcode, this was bettered by Masahiro Hara of Denso Wave who came up with the QR code payment technology in 1994, since then financial markets have evolved rapidly from physical banking to online banking to mobile banking, hard cash to cards and from barcodes to QR Codes to e-wallets. The Indian government aims at digitizing financial market and making it a cashless economy. With the digital payment market expanding rapidly it is mandatory that one keeps up with the actuals of what is happening around them. Today we are at a point where almost every day the front page of a news tabloid has a new e-wallet entering the financial market and each one promises to be better than the rest and they compete by topping the offer their competitor comes up with. On a broad spectrum, this will help reduce the corruption and make money more accountable.
With smartphones becoming a necessity, people today, especially the young generation has accepted and adopted to digitization. College students and corporate employees look at Cashbacks and discounts on everything, from movie tickets to high-end electronics, so, the extensive use of e-wallets and card-based payments seems justified. But is there a grey area that we as commoners should be aware of? Yes, there is, the cash backs and discounts may be tempting, but the priority should be how secure is one’s transaction going to be, not just the rewards and discounts. But unfortunately, we tend to flout the latter.
For every high there is a low; the high being the digitization of financial market, and the low all along has been security glitches like hacking, phishing, data loss and identity theft that comes with it. We are not new to discrepancies involving card based payments, we are so familiar with it that we tend to overlook it. Even the QR Code mode of payment has come into scrutiny due to security lapses, The People’s Bank of China, which is China’s central bank had banned QR Code payments in 2014 citing security concerns and a lack of regulation in the industry and released new regulations that would standardize security among different QR Code payment products in the Chinese market.
“Digitization is the way forward and it must be embraced with assurance and safety. The government and Fintech companies should adopt and encourage safe and secure transaction methods.” said Kumar Abhishek, CEO, ToneTag, in a statement.
ToneTag is a product first company driven to realize mobile payments and revolutionize the proximity communication ecosystem with their innovations. ToneTag technology uses sound waves to enable contactless, offline, proximity communication on any device. This technology benchmarks the security standards with features like patented noise filters, blockchain technology, three levels of encryption, tokenization, white box cryptography and multifactor authentication.
‘’The most important aspect being we as masses should look for digital transaction methods which are more secure than existing payment methods. What you stand to gain opting for rewards and cashback is meagre, but what you stand to lose could be worth millions’’ added Mr. Kumar.