By Joy Fang – my paper
Wednesday, Aug 15, 2012
SINGAPORE – Mobile-wallet technology, which enables payments to be made using a mobile phone equipped with near-field-communication (NFC) capabilities, is generally safe and secure, industry experts said.
But, like other payment methods such as credit cards, the onus is on consumers to protect themselves, they added.
NFC – a short-range wireless-communication technology for transmitting data between a mobile device and a reader – is set to catch on here.
A consortium of companies – including DBS Bank and Citibank; M1, SingTel and StarHub; EZ-Link; and digital- security company Gemalto – announced on Aug 3 that the mobile wallet can be used at 30,000 retail points by the end of the month.
Consumers can pay for items such as meals and groceries just by tapping their phones against a reader. A phone with NFC capabilities, an NFC-enabled SIM card and a credit card are needed to do so.
Gemalto’s chief innovation and technology officer, Mr Tan Teck Lee, said consumers can install passcode protection for the mobile device, SIM card and NFC application, making the payment method “as secure as existing payment services”.
Experts say the daily limit of S$500 and cap of S$100 per transaction should minimise the impact of unauthorised transactions.
Even if you lose your phone, fear not. An Infocomm Development Authority spokesman said one can call the banks to report the loss, and they will disable the service.
An “over-the-air termination” of the payment applications on the NFC phone can also be carried out if it is still connected to the mobile operator’s network, he said.
A DBS spokesman said consumers will not be liable for transactions made after the loss of the phone or credit card has been reported.
A check with the telcos here showed that they will distribute only NFC mobile phones and SIM cards that meet standards specified by global payment- standards bodies.
An M1 spokesman said that, if an incorrect password is entered multiple times, the NFC-wallet service will be disabled and customers will have to contact M1’s customer services to re-activate it.
All information is stored and encrypted in a secure memory area on the NFC SIM card, as well as during over-the-air data transfers between the phone and reader, said Ms Yeong Mun-Ling, vice-president of business strategy at StarHub.
Upon activating the payment option in StarHub’s Smartwallet app, users must tap their device on a reader within 30 seconds, and the app will close if left idle for two minutes, she added.
Still, some have expressed reservations over the risk that such phones might pose in the event of theft or hacking.
Mr Stuart Fisher, managing director for Sophos Asia Pacific, said the digital wallet is “still in the infancy stage”. Hence, security issues concerning NFC technology “can be thorny” as the mobile-wallet ecosystem “irons out complexities surrounding data encryption, payment verification and security credentials”.
“Cybercriminals are likely to target this platform once there is a critical mass of users to profit from,” he warned.
Mr David Hall, Symantec’s Asia-Pacific regional consumer-product marketing manager, said he expects the service to be widely adopted.
“But we still have a lot of education to do with consumers…when it comes to smartphone security,” he said.
“People don’t realise that the smartphone is a PC in their pockets, and stores a lot of important information and Web passwords.”
Not only should you lock your phone, but measures such as enabling your phone to be “wiped clean” if stolen are also essential, he added.
Mr Fisher said consumers should not let their NFC-enabled phone out of their sight when making purchases, and should review bank statements carefully.
Do not place the phone in your back pocket, or cybercriminals using NFC-enabled devices may be able to skim data from the digital wallet upon close contact.
Convenience is the key to widespread adoption where later even services for payment kiosk like SAM and AXS for all government services will be added, the poor can even prepay to topup their PUB utilities bills and Internet services.
NFC payments are more secure, quicker, and more convenient for users. Two companies that could benefit in a big way from this movement are Dolby Laboratories (NYSE: DLB ) and NXP Semiconductors (Nasdaq: NXPI ) . NXP makes the chips used in NFC-enabled mobile devices while Dolby Labs’ subsidiary, Via Licensing, owns all NFC patents. This means big royalties anytime NFC technology is used in a mobile device.
– Contributed by Oogle.