Digital wallets and banking apps… how safe are yours?
Digital wallets, like Apple Pay and Google Pay, along with mobile banking apps have fast become the go-to solution for making payments and managing money. Whether you’re paying for groceries, splitting bills with friends or shopping online, these apps simplify your financial life.
Their convenience is unmatched – no more fumbling for cards or cash! Just a quick tap or swipe on your phone, smartwatch, or even your fitness tracker and you’re good to go. However, with convenience comes responsibility.
In 2023, the National Anti-Scam Centre, run by the ACCC, reported losses of over $26.5 million from hacking and phishing scams alone. This highlights just how important it is to have security measures on our devices.
To keep your digital wallet safe, it’s important to understand both the potential risks as well as the available features designed to protect your money. We’ll not only look at what can go wrong but also provide practical steps to prevent it.
Digital Wallets and fraud – what could go wrong?
From phishing scams to device theft, there are a number of ways your financial information can be compromised if precautions aren’t taken. Here are some of the most common potential threats:
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- Phishing attacks: Cybercriminals often use phishing emails or fake messages that look exactly like they’re from your bank or payment app. Clicking on these links can lead to stolen login credentials or malware infections.
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- Device theft: If you lose your phone (or someone steals it), the person who finds it could potentially access your financial data, especially if security measures like biometric authentication or passcodes aren’t in place.
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- Insecure Wi-Fi networks: Public Wi-Fi may be convenient but it’s an absolute haven for hackers who can intercept data transmitted over unprotected networks. And sensitive financial information is at the top of their list!
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- Malware and spyware: Malicious apps or software downloaded onto your device can monitor your activity, steal your login details, or even take control of your device.
Digital Wallets and security – how is your money protected?
Fortunately, digital wallets and mobile banking apps often come with security features designed to protect your data. These include:
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- Encryption: All transaction data is encrypted. This means that even if your data is intercepted, it’s unreadable to hackers.
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- Tokenisation: Instead of transmitting your actual card details during transactions, digital wallets use unique, randomly generated tokens. This ensures your payment information remains secure.
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- Biometric authentication: Features like fingerprint scans and facial recognition add an additional layer of security, ensuring only you can access your wallet.
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- Real-time notifications: Many apps send instant alerts for any transactions, helping you quickly identify suspicious activity.
The future of mobile security for digital wallets and banking apps
The world of mobile banking security is under constant change to stay ahead of increasingly sophisticated cyber threats.
Examples of emerging technologies are artificial intelligence (AI) and machine learning, both of which are being used more readily to identify and prevent fraudulent activity, and include:
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- Real-time fraud detection: AI analyses transaction patterns instantly, flagging unusual activity (such as unexpected purchases or foreign transactions) to prevent fraud.
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- Behavioural biometrics: Features like typing speed, swipe patterns, and device handling can add a personalised security layer that’s difficult for hackers to mimic.
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- Blockchain and encryption: Enhanced encryption methods and blockchain technology ensure stronger data integrity and protection.
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- Proactive threat detection: AI identifies malware patterns and security vulnerabilities, enabling developers to issue updates before threats materialise.
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- Advanced multi-factor authentication: Innovations like voice recognition and dynamic codes improve security while providing ease of use.
As these advancements continue, digital wallets and banking apps will become not only more secure but also smarter, offering users peace of mind without compromising convenience.
But while the future of mobile security looks promising, staying informed and adopting best practices is the best way to stay a step ahead of potential threats. Here’s a few practical, actionable tips to keep your digital wallet secure.
Five practical steps to keeping your digital wallet and banking apps secure
Sound familiar? It’s Monday morning, and you’re running late. You skip breakfast, grab your phone, and head out the door. You head to the café and order your usual coffee with a quick tap of your phone.
Later that day, you pop to the shop to grab some lunch. Again, another quick tap of your phone.
As you scroll through social media on your lunch break an ad pops up – your favourite brand is having a sale and that item you’ve been eyeing off is 25% off! You add to cart and checkout using the credit card saved in your digital wallet.
It’s all so seamless, you don’t think twice.
While digital wallets, like Apple Pay and Google Pay, are convenient, efficient, and becoming an increasingly popular method of purchasing, they’re not immune to risks. Fortunately, with a few simple precautions, you can enjoy the ease and convenience of digital payments while staying protected.
Step 1: Keep your digital wallet software and banking apps updated
A common misconception about phone updates is that they’re just about new features. This isn’t the case – updates often patch security vulnerabilities that hackers exploit. To make sure your digital wallet is protected, ensure your phone, operating system, digital wallet apps, and banking apps are always up to date.
How to do it: Head to your App Store and enable automatic downloads/updates for both your phone and apps.
Step 2: Protect your digital wallet by using biometric security features
Biometric authentication – such as fingerprint scans or facial recognition – is becoming increasingly common. Why? It’s harder to hack than traditional PINs or passwords. So, if your phone supports these features, enable them for your digital wallet.
How to do it: Go to your App Security Settings and ensure you have fingerprint scans or facial recognition set up for purchases.
Step 3: Avoid public Wi-Fi for financial transactions
Public Wi-Fi networks are convenient but insecure. Hackers can easily intercept data transmitted over these networks, putting your financial information at risk.
What to do instead: Use mobile data or a secure, private Wi-Fi connection when accessing your digital wallet or mobile banking apps. If you must use public Wi-Fi, connect through a trusted Virtual Private Network (VPN).
Step 4: Protect your digital wallet and banking apps with strong, unique passwords and a password manager
So many of us reuse passwords for ease and convenience. The kicker? Weak or reused passwords are a hacker’s dream. Create strong, unique passwords for your digital wallet and banking apps, and use a password manager to keep track of them.
Recommended tools: Apps like LastPass or 1Password can generate and store complex passwords securely.
Step 5: Be proactive and monitor your statements regularly
Regularly review your bank and credit card statements for unusual activity. The sooner you spot fraudulent transactions, the faster you can act to minimise damage.
Quick tip: Many banks and apps allow you to set up alerts for transactions over a certain amount, providing an extra layer of monitoring.
How do I protect my digital wallet if my device is lost or stolen?
If your device goes missing, it’s critical you take immediate action to protect your financial accounts:
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- Remote lock and wipe your device: Use ‘Find My iPhone/Device’ to lock or erase your phone remotely.
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- Notify your bank and financial institutions: Inform your bank about the loss. They may temporarily freeze your account or monitor it for suspicious activity.
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- Change your passwords: Update passwords for all linked accounts, including your digital wallet, email, and banking apps.
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- Disable payment apps: Most apps, like Apple Pay and Google Pay, allow you to remotely disable payment functionality on a lost device.
By following these steps, you can enjoy the convenience of digital payments without compromising your financial safety. And remember, in an age where digital is becoming an increasingly essential part of our everyday lives, staying proactive is the best way to outsmart potential threats.
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