Ready cash: mobile payment apps come with opportunities--and risks.

• Author: Mischel, Marie
• Position: Techknowledge

Mobile payment apps, which let customers pay for purchases with a swipe of their mobile device, are proving a boon for merchants and consumers alike. Mobile payments let micro-businesses, like artisans or landscapers, easily accept credit card payments and enable consumers shop cash free.

But how safe are mobile payment apps or mobile credit card swipers? How can consumers protect themselves when paying via their iPhone? Are businesses liable for safety breaches?

Consumer Demand

Far from being leery of mobile banking technology, consumers seem to be embracing it with enthusiasm.

Mobile apps are so convenient that retailers are using them to extend their brand and their ability to sell, says Tom Karren, CEO and co-founder of MokiNetworks, a Lehi-based company that builds mobile and cloud apps. "We are even seeing cases where retailers are putting mobile commerce applications on dedicated devices inside brick and mortar stores to extend their ability to sell items that they may not have in stock," he says.

"Customers just love the ease and convenience of mobile says Brian Pearce, senior vice president and head of the Retail Mobile Channel at Wells Fargo's Digital Channels Group.

In the first quarter of 2012, Wells Fargo had more than 7.7 million customers using 0 mobile services. "It's just a really, really popular way for our customers to manage their financial lives," says Pearce. "And as a bank, we're interested in being where our customers are. It's really important to be able to connect with our customers and be able to provide them with our financial services anywhere that works for them."

With that convenience, though, comes the risk of financial data being compromised. Pearce says Wells Fargo deals with that in two ways: maintaining a robust security structure and educating customers.

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"One of the keys to developing an app securely is to never store information on the device," Pearce says, pointing out that all bank customers' financial information is stored solely on Wells Fargo secure servers.

To help educate consumers, Wells Fargo created a "Fraud Information Center" on its website. Among the most important tips on the website, Pearce says, is that consumers should download mobile apps only from reputable sources, and they should never open attachments, click on links or respond to emails from suspicious or unknown senders--information that's helpful to all mobile app users.

Safety First

Scott Nelson, vice...