Are digital payments safe or unsafe why

"Mobile payment is far too insecure ..." | 6 Myths About Paying
with the cellphone

Ciao cash, goodbye signature, bye-bye credit card with pin: paying by mobile phone is on everyone's lips. Simply hold your smartphone up to the reader at the checkout and bang: pay. Shopping is even easier this way, 57 million Germans already have a smartphone according to statista.com - and most of us always have it with us.

But: For many Germans, mobile payment is still a topic with many question marks - especially because there are many errors about it. Consumers therefore use what they know: cash. According to the Bundesbank study, three out of four purchases (74 percent) were paid for with banknotes and coins in 2017. There is no reason to be afraid of contactless payments with your mobile phone!

Why? Explains Dr. Michael Littger, Managing Director of “Germany Safe in the Net” (DsiN), and also debunked six myths about mobile payment.

Myth 1: Mobile payment with your cell phone is unsafe

Dr. Littger: “Not true. Mobile payment is even safer than paying with cash. Because the smartphone becomes a wallet - and nobody gets your money here: The providers (e.g. Google Pay) encrypt the data for payment and translate them into so-called tokens, i.e. numerical codes that cannot be read. These tokens are then only valid with this device. And: Only the provider (e.g. Google Pay) and the provider of the payment method stored there (e.g. PayPal) know the tokens. With both the data is well protected and will not be passed on. "

I want to pay with my mobile phone - this is how it works with Google Pay and PayPal

To be able to pay with your mobile phone, you need a payment app from a provider, e.g. the Google Pay app from the Play Store. Install this on your Android smartphone and choose the payment method PayPal out. A digital Mastercard is created in the background, which from then on serves as a source of payment - everywhere where contactless payment with Mastercard is accepted. As soon as you are at the checkout, simply unlock your smartphone, hold it to the card reader and wait for the payment process to end. When this is completed, a confirmation appears. You can now lock your mobile phone again: your purchase has been paid for.

Myth 2: It will be forever before you can pay with your cell phone everywhere


Dr. Littger: “No, definitely not forever! The infrastructure and services are already in place in most stores. You can recognize this by the radio symbol on the cash register or the entrance door. I assume that we will pay by cell phone faster than many think. Most Germans are open to it: A study by the consumer organization Saxony showed that two out of three Germans already pay online or with a card at least once a week. So cashless payments are well received! Practical with mobile payment: you always have your cell phone with you anyway. "

Tip: Look out for the radio wave symbol on the cash registers or shop doors - if you can see it, you can pay via NFC with your mobile phone.

What exactly is NFC?

In Germany, almost nothing works with mobile payment without NFC! The translation is Near Field Communication (Eng. near field communication) - a wireless transmission technology with which data can be exchanged between devices at a distance of up to four centimeters. This data is the so-called token when paying with a smartphone.
To put it more simply: We used to push the money over the counter, today the seller receives the token with the NFC waves, which also initiates the payment of my purchase. Cash registers and shops where you can pay via NFC are marked with a radio wave symbol (see graphic).

"By the way, kiosk owners in particular are eager for mobile payment to be accepted across the board, because then they no longer have to bear the risk of cash and are no longer an attractive target for robberies," explains Dr. Littger.

Myth 3: I always have to be online when I shop

Dr. Littger: “No, you don't have to. Five to ten of the so-called payment tokens are stored on your device in offline mode, i.e. you can use them to shop five to ten times without having to go online. Several tokens are stored at the same time so that the merchant can be sure that you can also pay. As soon as you are online again with your mobile phone, new tokens will be downloaded automatically. "

Myth 4: You spend more money on mobile payments because you don't have an overview of your account

Dr. Littger: “Not necessarily. There is no difference to paying with an EC or credit card. And via the transaction overviews in apps such as the Google Pay or PayPal app, I can always see what I bought when and at what price. You can't do that with cash! My tip: Check your shopping list once a week or immediately after shopping. In this way you can immediately see whether you have gone over the top financially. "

Modern encryption makes mobile payments more secure from hackers.

Myth 5: If I lose my cell phone and someone pays with it, I'll be left with the costs

Dr. Littger: “That's wrong! In most cases, the mobile payment provider is legally obliged to credit you with the money after a fraudulent payment. The terms and conditions regulate this in detail. But: Before it even gets to the point where a stranger can pay with your mobile phone, several protective walls have to be broken, which is not that easy, because:

►1. Most cell phones are or should be locked.

►2. Authentication is required from a purchase value of usually 25 euros.
With two-factor authentication such as PIN, fingerprint or Face ID, you have to identify yourself, so to speak, that you are the right person to carry out the transaction.

►3. Banks and providers can recognize unusual withdrawals!
Then they stop the transaction and, to be on the safe side, ask whether it is really you who is shopping.

►4. The reimbursement of costs by the provider is regulated in most terms and conditions in favor of the customer.
This is different with cash: once it's lost, it usually stays gone! Still important: As soon as you lose your cell phone, report it immediately to your provider, who will then invalidate your tokens. When you have a new cell phone, simply download the app again, log in, re-authenticate and you will be reconnected to your existing account. "

Myth 6: Mobile payment costs extra fees for each purchase

Dr. Littger: “No, payment is usually free of charge. What can cost something is the app itself. Some providers charge a one-off price for downloading the app or a monthly fee. But that is made transparent. And: There are also free providers, such as PayPal in Google Pay. "

Are you an ace when it comes to mobile payment or do you still need tutoring? Test your knowledge of contactless payment in our quiz!