There are risks as well as benefits to using a mobile device such as a smartphone or a tablet to access bank or credit card account information or to make purchases or payments. This article describes some of these pros and cons and concludes with a series of tips intended to help Arizona consumers practice safe and secure mobile banking.
BENEFITS of using a mobile device for financial transactions:
If you have a bank account, you can access your account information (to look up your balance or track your spending) at any time from any place. (You do not need to go to your bank during business hours).
By being able to look up your balance and track your spending 24 hours/day, you can make sure that you have enough money in your account to cover a purchase or payment. (If you do not, most banks will charge you an overdraft fee of $35.)
You can set up an alert that will notify you by text message, email, or though your bank’s smartphone app if your account balance is low or if you have exceeded your credit limit.
You can deposit paper checks in your bank account through “remote deposit capture” by taking a photo of both sides of the check using your smartphone and then sending those photos to your bank through your bank’s smartphone app.
You can pay your bills electronically, without using (or having to pay for) paper checks.
If you do not have a bank account, you can use a prepaid card to make purchases and payments.
RISKS of using a mobile device for financial transactions:
If you access your account information or make payments or purchases using your smartphone while connected to a Wi-Fi network (whether at a coffee shop or at home or work), rather than a cellular network, your transactions may not be encrypted.
Your smartphone is a portable mini-computer that a hacker may target in order to steal your personal information. If a hacker sends you a text message that looks official, but is not, and you click on the link that appears in the text, you risk instantly infecting your smartphone with a virus or other malware.
If your smartphone is lost or stolen, and any of your personal information (user ID or password, for example) has been saved on that device, or you never completely logged out of the banking app or website that you use, then the person who takes or finds your phone may be able to access your account.
Even though your smartphone gives you access to your account information 24 hours/day, that information does not always include your most recent purchases or payments.
1. Select and use a strong, hard-to-guess password to safeguard your smartphone.
2. Whenever possible, conduct financial transactions using your smartphone while it is connected to a cellular data network, rather than a Wi-Fi network.
3. If you need or want to use a Wi-Fi network, then use a Wi-Fi network that has a WPA2 (the safest) or WPA (somewhat safe) security protocol. Unless you have no other option, do not use a Wi-Fi network that has a WEP security protocol. (The kind of security protocol that a particular Wi-Fi network is using will be displayed next to the box that asks you for a password.)
4. If at all possible, always avoid using free public Wi-Fi networks to access your account information or make payments or purchases. So-called “hotspots” are especially vulnerable to hacking.
5. Use secure websites with URLs (addresses) that begin with https://, rather than http://.
6. Whenever possible, use your bank’s (or prepaid card supplier’s) authorized smartphone app, rather than its website, to access your account. (Web browsers, such as Internet Explorer, are less secure.)
7. Make sure to keep your password(s) private. Do not share your password(s) with other people and do not let people look over your shoulder.
8. Always completely log out of your account (and your smartphone app) as soon as you are finished. If you used a web browser, be sure to close it.
9. Never store your log-in information (including your user ID) on your smartphone.
10. Never respond to unverified texts or emails from your bank or any other financial services company. Your bank (or prepaid card supplier) will never ask you for your account information by text or email.
11. Only update your bank’s (or prepaid card supplier’s) smartphone app through its own website or an official app store. Never open any strange link that claims to contain a downloadable update.
12. If your smartphone is stolen, contact your bank (or prepaid card supplier) right away to ask them to monitor your account and to freeze it if any unusual transactions take place.
13. As soon as you get a new smartphone, remove all personal information (and anything else that you think may help a stranger identify you) from your old device.