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Chapter by Melissa Ngo

"The Myth of Security Under Camera Surveillance"


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    McClatchy: Mobile wallet technology raises privacy, security concerns

    McClatchy reports on technology that allows individuals to pay for products through their mobile devices, such as smartphones, and how the technology raises privacy and security questions:

    As the number of neighborhood bank branches dwindles, Americans increasingly use their mobile phones to manage money and shop. Payments made via mobile devices in the United States are expected to total $90 billion by 2017, a big jump from the $12.8 billion spent in 2012, according to Forrester, a research and advisory firm headquartered in Cambridge, Mass.

    Privacy advocates worry that the emergence of “mobile wallet” technology will leave consumers more vulnerable than ever to identity theft and invasive data collection.

    “All of a sudden the mobile phone is about to be transformed beyond a spy in your pocket to your bank, your mortgage lender and your landlord,” said Jeffrey Chester, the executive director of the nonprofit Center for Digital Democracy in Washington. “In a way, it’s kind of a privacy tipping point, because one single device knows wherever you go your geographic history, your social media connections and your financial behaviors.” [...]

    Such technologies offer convenience and real-time deals to consumers while allowing companies to better track customer behavior and test marketing strategies. Mobile payments already are widely used in many developing countries, where cash is scarce and the technology allows people to transfer money safely over long distances, avoiding theft and bribes.

    But in the United States, the Federal Trade Commission warned in a report this month that these low-cost or no-cost mobile technologies come with hidden costs and risks.

    Advertisers, retailers, operating system manufactures and app developers can use the data collected from mobile devices to build more comprehensive consumer profiles, including shoppers’ personal contact information, details of their purchases and their physical locations, the report said. [...]

    Privacy advocates worry that consumer protection laws are lagging behind the technology.

    “At the end of the day, this is about exposing your financial behaviors to a daisy chain of financial and other marketers who will have a very detailed understanding of where you are, where you spend your time and how you buy,” said Chester of the Center for Digital Democracy. [...]

    As the popularity of mobile payments grows, companies’ privacy practices could face more scrutiny.

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