Fed Says NFC-based Mobile Payments More Secure than Magstripe

by Mercator Advisory Group 0

The Federal Reserve Bank of Boston and the Federal Reserve Bank of Atlanta released a report called Mobile Payments in the United States, Mapping Out the Road Ahead on March 25, 2011. One of the authors, Cynthia Merritt, recently wrote a blog entry making it clear that the hardware available for contactless payments embedded in a mobile phone (aka NFC) will be a big boost for payments security. We need that kind of endorsement.

“Card payments grow riskier every day as the United States remains reliant upon mag-stripe technology, which is very easy for criminals to breach and then use to clone cards for illegal payments,” she states. “Because mobile devices will use contactless technology in the form of an embedded computer chip, the mobile phone will be a much more secure payment device than the plastic cards we use today.”

The report from the Fed, Mobile Payments in the United States Mapping Out the Road Ahead, points out that road is going to have more than a few hills, rocks, potholes, and other obstacles to surmount. Do read the report. It’s worth your time.

Click here to read the article.