Hopping Aboard The Mobile Payment Bandwagon? Bring A Helmet

Implementing mobile payment systems presents a high risk, high reward opportunity



In 2011 mobile applications went mainstream, captivating consumers with fun games, useful utilities and plenty of branding thrown in there for good measure. As businesses continue to pump out new applications to engage with customers, it is likely that developers will be asked to shift gears to reprioritize mobile apps as a marketing vehicle into something that drives top-line revenue into company coffers. However, that kind of shift will require companies to dive headfirst into mobile payments, a prospect both thrilling and terrifying at once to savvy CIOs. Because though there is tremendous opportunity to grow the business through innovation with mobile payment and ordering systems, that opportunity brings a lot of risk.

An enterprise approach should follow a comprehensive and compartmentalized architectural approach based on the business needs, the opportunity, any risks or disruptive elements of technology adoption, says Michael Iseyemi, global chief security officer for Aditya Birla Minacs. Specifically to mobile payment, the most important considerations in addition to the aforementioned items are security of the stored data, the security of the data transmission while it is in transit and who the data is being transmitted to.

Organizations are finding it difficult to keep these principles in mind during the headlong rush into mobile payment system development, says Randall Rivera, senior enterprise architect for Excellis Interactive. His firm is currently working with a lot of Fortune 500 companies to help them securely build a mobile component into their business strategies. One of the first thing he advises them to do is take stock of what their current ecommerce systems already look like and try to leverage what security measures they already have in place.

At the end of the day, mobile is just another outlet and it should work under the same umbrella as other systems, he says. If you architect it properly, all of the systems go under the same service. If youve got the infrastructure to leverage, dont build it from scratch.

However, weakness in already existing infrastructure will only be amplified by mobile payment development, Brian Vosburgh, senior solutions architect at Stonesoft, warns.

Mobile payment providers, developers, and retailers utilizing mobile payment need to be mindful of the entire ecosystem, Vosburgh says. A securely developed app on an insecure or under-secured provider or retailer's network is just an insecure app this is the old "weakest link" clich but it is tried and true.

Thats not to say that the mobile form factor doesnt present its own weak links in the payment ecosystem. There are a number of security concerns that must be taken into account for payments taken over mobile devices. Because even the most veteran mobile developers have only a few years experiencing coding for such a unique platform, application security is an even bigger issue than in other environments. For example, Rivera says a frequent practice is depending on insecure caching on the device.

Some developers use caching mechanisms that stores some of the data on the device, so if the device got lost a hacker could plug the device in and get sensitive data, he says.

Given how easy it is to lose a device or have it stolen, this is a potentially huge problem.

One of the key problems in mobile payment solutions is the concern that what would happen if the phone is hacked or lost. If phone is lost or stolen, data on the phone might be accessed directly and can be used to compromise phone owner's accounts, says Tan Sarihan, President , KOBIL Technologies, Inc. A good solution should ensure application integrity, mandate multi-factor authentication (and) secure communications, and should not rely on the operating system because it could be compromised.

Ron Perry, Worklight CTO, agrees that phone loss or theft can be mitigated through multi-factor authentication and he echoes Sarihans sentiments about application integrity. This will grow with importance as black hats also learn to navigate the mobile environment and innovate with new thieving schemes.

Hackers have developed a practice of "repackaging" legitimate apps with malicious code, and distributing them to unsuspecting users. This presents a very real risk when payments are involved, says Perry, who believes that organizations should think about implementing server-side technologies for testing the authenticity of the client-side app.

Additionally, organizations will want to limit their risk by being careful about how mobile payment systems are architected within the network.

The maturity of mobile payment services will be measured by the complexity and innovation of coding, says Mike Driscoll, founder of Zodiac Technology, a start-up that focuses on IT support for small businesses. A great example of increased mobile security, as some applications have already begun using, is to compartmentalize the way these systems access data. This offers a more refined way to control information and a faster way to react to security breaches.

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