Are mobile payments safer?

The mobile device invasion of restaurants is here to stay. Servers are armed with portable devices that can run credit cards at the table. A whole new wave of mobile payment services lets customers pay up wirelessly with mobile wallet apps on their phones. Anytime money and private data are involved, security issues arise. Just how safe is that mobile payment system you’re looking at investing in?

Lee Holman is lead analyst with the IHL Group, a retail and hospitality technology research and advisory firm in Franklin, Tennessee. “At the current moment, mobile POS and mobile payments are going to be more secure than traditional payments in the restaurant,” says Holman. “I say that because the bad guys are just now developing their plans for attacking this stuff.” Just as thieves innovated with credit card skimming devices and online account hacking, they will eventually make inroads into mobile payments. “Any of these things, given time, will be exploited by the bad guys. As mobile transactions increase, then it becomes much more of a problem,” says Holman.

It’s easy to get blinded by the newness of mobile payment technology, but the security issues aren’t that much different from older methods of taking payments. Online databases of financial information are still targets for hackers. And consumers with financial data on their phones need to rely on PINs and passwords for protection if their devices are stolen. Restaurants do have the added wrinkle of needing to physically protect the devices they use to accept payments, whether it’s an iPad equipped with a Square device or a tableside handheld. “The heavy level of turnover in some of these restaurants is an issue because the devices are easily [stolen],” says Holman.

Holman suggests checking with your POS manufacturer for mobile offerings. This can add a layer of peace of mind if you’re happy with the existing security safeguards of your POS. Holman also advises that restaurants considering accepting mobile wallet payments should be cautious about jumping in until service providers have proven their staying power and security issues get shaken out. “As dynamic as things have been, restaurateurs probably want to take a step back and watch some of the developments,” he says.

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