As the global economy evolves, so does the ways in which people pay. Cash was once king, until credit and debit cards took its place. And now, e-wallets are giving both cash and plastic a run for their money.
But how safe are e-wallets as compared to cash or credit card? Credit cards are still regarded as a trusted source of payment mode around the world, with credit card companies being lauded for their efforts, as evident in the success rate of managing consumers’ money.
However, this doesn’t mean that e-wallets are not gaining popularity. According to the study conducted by Accenture in 2017 titled Driving the Future of Payments, of the 1,500 consumers surveyed in the US and Canada, 64% plan to use a mobile wallet in 2020.
This goes to show that consumers are becoming more open and receptive to try out a more convenient payment option to serve their daily needs.
For one, e-wallet providers are not privy to users’ private banking information. Rather, they act as proxies and only capture the transactions made with the money that is stored within the e-wallet itself.
Besides, consumers can reload their e-wallets whenever they want, even before a transaction and with the exact amount they are going to spend. What’s more, as e-wallet apps are encrypted with the highest security standards, end-to-end transactions become much faster.
In terms of security, since the e-wallet app is stored on a smartphone, users also receive an added layer of protection, given that smartphones are now equipped with a variety of security measures such as password protection, voice recognition and fingerprint access.
Addressing Cybersecurity Concerns
Despite e-wallets becoming the new way to pay, they also come with various threats and risks, with the rise of e-wallets giving convenience to users but at the same time also opening new doors for money-hungry hackers.
“Digital payment apps from different players – from big companies to the freshest start-ups – make the financial industry highly fragmented,” notes Kaspersky Lab General Manager (Southeast Asia) Yeo Siang Tiong.
“While banks have their own ways to secure their networks and systems after the recent headline grabbing cyberattacks, e-wallet companies have yet to establish a more concrete security framework.”
According to Yeo, in addition to apps, online payments are also powered by Quick Response (QR) codes which efficiently allow financial transactions to be one scan away. This does not mean, however, that they are completely safe, as these QR codes may contain potentially dangerous links within them.
“We have since warned about how cybercriminals can use this shared infrastructure technology to steal money – from replacing pictures with codes online to physically gluing their malicious QR codes over genuine ones on real-world posters and notices,” he reveals.
On whether Malaysians are doing enough to protect their phones from these cyber threats, Yeo notes that according to the Malaysian Communication and Multimedia Commission, awareness from smartphone users to protect their personal data has increased, with 64.5% of users vigilant in protecting their mobile phones using password and 44.5% backing up their photos and contacts.
Unfortunately, the number of Malaysians with mobile device security solutions on their smartphones remain low.
“Smart gadget users need protection for their devices. When you buy a PC or a laptop, the first thing most users would do is to install an antivirus solution. However, the same cautious approach does not apply to smart devices like smartphones and tablets. Sadly, many would install physical security essentials such as screen protectors or protective cases instead,” Yeo laments.
Indeed, with their online money available to be transferred and received in just a few clicks within seconds, e-wallet users now have a heavier responsibility as to how they secure their devices and their finances.
“E-wallet users have to be more cyber-savvy now. They have to be aware of the existing risks as well as the precautionary measures to keep themselves and their hard-earned money safe,” Yeo concludes.