Mobile money is here

I am not a purse user. The furthest concession I make towards wallet owning is a money clip. I carry a 4.7-inch smartphone and despite that (or maybe because of) I refuse to tote a leather sack of money around too.

I'm therefore an enthusiastic proponent of the mobile wallet app, a handy download that lets you use your smartphone to spend money.

At least, in theory I'm enthusiastic. 

Last week, O2 announced its new O2 Wallet, an app that connects a user's bank account with their phone number to allow money transfer between two phone numbers. You don't need to share your bank details for someone to pay you back – and you can also use it at several high street retailers too.

Sounds great, easy, convenient and most importantly for me – wallet-free. But having just signed up for my own O2 Wallet, I was surprised to feel about twenty kinds of reluctant just handing over my phone number. It's not like my sort code and account number would give a would-be scammer free reign of my finances – so where's the sudden shyness coming from?

Smartphone banking may have quite a few big backers - Barclays is one of its main proponents, with its O2 Wallet-rivalling Pingit - but when it comes to the security of banking by mobile, there's still a major mental hurdle for most of us to overcome.

And the reason for that is pretty simple – most smartphones aren't secure.

The BBC is reporting that December alone saw 1,000 new smartphone viruses (more than in the last eight years of smartphone history), while on the flip side, most people simply don't treat their smartphones like the computer that it is.

They're not careful about what apps they download, they don't use antivirus programs, and many don't even set a password lock on their phones. (At least one of those applies to me.)

All this makes it easier for hackers or even a random passerby picking up the phone you dropped to get access to your information – something that becomes exponentially more damaging when that information is tied to your bank account.

A lot of successful scamming comes from behavioural glitches – carefree link clicking, no set passwords or simply losing your phone. So conversely the Barclays and O2 apps are safer than it might seem. Barclays Pingit is protected by user password; O2 says that in addition to PINs and passwords, all personal details and financial data are held on remote central servers rather than on your phone.

If your phone is stolen, thieves can't immediately access your account while hackers targetting your phone wouldn't immediately get your data. But there are still trojan viruses floating around that can log keystrokes and form data to collect this info.

Bottom line? If you use virus protection on your smartphone and recognise that are dodgy downloads floating around, smartphone banking can be secure as desktop online banking.

And just like we've been conditioned to check for the little ‘https' in a web address before digitally handing our money to a faceless entity, similar pragmatism can be applied to smartphone cash money situations too.

I might not, for example, hop onboard BT Openzone to input my credit card details for that new plasma.

At the very least, using a mobile wallet app is safer than using the smartphone browser for making that transaction. Just make sure you've installed an antivirus app.

What do you think? Are you downloading O2 Wallet or Barclays Pingit right now, or will you wait till the technology behind mobile money is more regulated?

What do you think? Are you downloading O2 Wallet or Barclays Pingit right now, or will you wait till the technology behind mobile money is more regulated?

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  1. Guest
    Guest28th May 2012

    Well, the way I see it is this... Almost any application can access private data without us even knowing!I wouldnt feel comfortable at this stage to ...

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