Special Report: Changing currency to electronic wallets

ALBANY, N.Y. – Swiping plastic could become a thing of the past.

It’s how a newer generation of shoppers are paying – electronic wallets. It may be convenient, but is it safe?

Rosa Bautista, 23, loves shopping, but she never uses her wallet to pay for any of it.

“It’s easier,” she said. “It’s a lot easier. All you need is your phone and pretty much everywhere you can use it.”

She’s talking about her hand held wallet. It’s the newest form of payment that a lot of stores at the mall are using, and it comes on a smartphone.

“I have my Chase; there’s the Discover and SEFCU,” she said of the app Google Wallet.

Bautista carries all her financial information in one place, including credit cards, loyalty program cards and all her bank information. But is it all safe on her phone?

“Not a big fan of carrying around wallets and big chunky stuff,” UAlbany School of Business Dean Dr. Donald Siegel said. “Easier to grab your phone and go. I am confident that within in five, maybe ten years max, there will be a significant portion of the population using this technology.”

Apps like Google Wallet, Apple Pay and PayPal make it easier for shoppers like Bautista to tap and pay.

“I was hesitant to put in my information,” she said. “What if there was a breach?”

So how safe is she?

“This will actually be safer believe it or not,” Dr. Siegel said. “All of the persons transactions will be in one location. If a breach occurs, they will be aware of it more quickly.”

But GreyCastle Security Chief Security Strategist Dan Diddier, whose day job is to hack into computer networks and find their vulnerabilities, said it’s not that simple.

“There’s no doubt that cybercriminal hackers are actively looking for ways to get control of your digital wallet,” he said. “There are professional hackers. Their day job is to find ways to exploit money from Americans.”

And even if there are multiple layers of security on the app, such as fingerprint recognition or pins, other gaming or social media apps you download may put your financial information at risk.

“Oh, by the way, when you install that app, it’s looking for permissions to basically look at everything on your phone,” Diddier said. “Now your digital wallet is at risk.”

Even though most consumers carry less cash than ever, security remains a major barrier to adopting the e-wallet. Some security experts said they will wait before they use the newest form of payment.

Adding a pin to your phone’s lock scree can add more protection, and in most cases, the financial data is encrypted on the apps.

Diddier said there has already been a security breach with Google Wallet, but with enough time, criminals can find a vulnerability whether it’s a virtual wallet or credit cards, so being vigilant is key no matter how you pay.

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