Mobile payment: data protection and security

data protection in mobile payment

Privacy on the internet has been a highly debated topic for years. Numerous experts regularly comment on it in public. However, really important questions often remain unanswered for users. Is personal data really stored and protected by internet services? Or is it deliberately passed on to third parties for marketing purposes? When it comes to data protection, things get interesting, but also often complicated, when it comes to the security of mobile payment processes.

The most common concerns about mobile payment

Despite the increasing number of possibilities for mobile payments with smartphones, the opinions of many consumers on the use of mobile payment methods still differ greatly. Scepticism about questions of security and the processing of personal data remain.

  • What is behind pages and pages of data protection policies that are almost always simply accepted by users anyway?
  • And how do companies deal with extremely sensitive data such as private bank details?
  • In addition to these data protection fears, there are also security concerns. Many users are afraid that companies will process more than the data necessary for the transaction. They also fear that mobile payment transactions offer a target for cybercrime.

As a result, many users are hesitant to use mobile payments. They stick to the usual methods of cash or credit card payments to maintain their anonymity. Users also say that they have much more control over payments when paying by cash or card.

The possibilities of mobile payment

There has long been no talk of a breakthrough in mobile payment methods in the technology industry, as many payment solutions have been established on the market for a long time. The period of the lockdowns and the Corona pandemic have also boosted this development. Nevertheless, the number of Germans using mobile payment is still quite low.

There are numerous ways to pay with a smartphone. For example, many banks have already developed their own apps. These apps not only enable online banking, but also have a direct payment function via an NFC interface. In addition, there are various interfaces that offer payment services such as Google Pay, Apple Pay and PayPal (Verbraucherzentrale NRW e.V., 2021).

Our qnips platform also offers you the possibility to integrate your preferred payment service provider. In addition, we already offer a pool of payment providers tested by us from which you can choose.

Payment Service Provider with interface to qnips
qnips acts as a marketplace for numerous payment service providers and interface to your preferred payment provider

The most important regulations & guidelines for secure payments via smartphone

Overall, the topic of mobile payment and data protection is quite extensive and complex from the user’s point of view. As a user, you often go through two registrations, as many mobile payment providers work together with other payment services. Customer data on the web is stored everywhere by developers today, but the motives behind are different. Not every provider reserves the right to use collected information for marketing or advertising purposes to make money. There are also significant differences between the types of information collected.

Mostly, however, data collection is the price the customer must pay if they want to enjoy free services. To protect consumers, the EU Commission has issued numerous guidelines for mobile payment providers. From 2022, the uniform catalogue of requirements “Dora” is to ensure even more data security. Currently, among other things, the second payment services directive PSD2 is in force (Springer Fachmedien, 2021).

Security procedures for mobile payment

From now on and in the future, the recommendations on payment security and data protection will be directed at mobile payment providers and will particularly serve the security, rights and information of the consumers.

SCA (Strong Customer Authentication) as part of PSD2 is designed to increase security for mobile payments and reduce opportunities for cyber fraud. This is a two-factor authentication in which users must confirm their identity e.g. by fingerprint or SMS code. 3D Secure as a security method is increasingly used to implement the requirements of the SCA and to automate a second authentication step.

In addition, the General Data Protection Regulation (GDPR) contains further specific regulations when it comes to the rights of individual users regarding the protection of their personal data.

qnips Mobile Marketing solution
With the mobile payment solution from qnips, your customers can easily keep track of transactions and credit balances

Data protection in mobile payment at qnips

The data protection at qnips concerns personal data such as name, email and postal address, telephone number and login data. In principle, customer data is not passed on without the consent of the respective user. There are only a few cases defined by law in which qnips is obliged to do so. These are listed in detail and comprehensibly in our privacy policy. You can also find out which user data is stored when and in which cases. In most cases, however, this only serves to optimise the usability of the app.

qnips does not encounter sensitive information such as credit card data. The data is processed by the respective payment service provider and is subject to PCI-DSS, or is processed with 3D-Secure. The PCI Data Security Standard is a global security standard for the processing, storage and transmission of cardholder information and authentication data.

We can also support you with a mobile payment solution for the digitization of contract catering or you have questions about further features from qnips? Then get in contact with us today. We take questions and appointments via or via +49 511 165 899 0. 

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