The True Secret to the Digital Wallet May Be In Your Other Pocket

NEW YORK (MainStreet) —Big players across the tech and financial services industries are trying to perfect digital wallets, apps that let you shop with your smartphone instead of cash or credit cards. But a key challenge is convincing consumers that the technology is safe. Who is going to link his or her bank and credit card accounts to a single app when another growth industry for smartphones is malware? Mobile security company Lookout has predicted 18 million smartphones might encounter malware or spyware this year.

Also see: Fear and Loathing with the Digital Wallet

Still, if companies can convince consumers that digital wallets are secure, that could open up a new world of smartphone use including apps that open your car, apartment and office. "Transactions for money and keys for opening doors are, in the philosophical meaning, values," said Ahmad-Reza Sadeghi, developer of a German key app called Key2Share. "Money is a value, and keys give you access to value."

 

The risks of apps that trade in each domain also turn out to have much in common.

A 2012 survey by Forrester Research, which advises companies on technological changes, found that just 2% of U.S. consumers had ever used smartphones to make in-store purchases.

Also see: MasterPass, Digital Wallet Solutions at Your Fingertips

Along with complaints that digital wallets at their current state of development are confusing, people are worried about hacking and the risk of losing a smartphone loaded with sensitive financial data.

 

Harlan Hutson, president of Acuity Systems in the San Francisco Bay area, played down that last concern, saying, "Stolen and lost phones accounted for 0% of cyber crime committed on mobile phones."

But, he said, as more people use their phones to make purchases, there will be reason for cyber criminals to try and do attacks on mobile devices.