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August 16, 2012 11:14 AM
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Mobile Payments Raises Security Concerns

Mobile Payments Raises Security Concerns | MobileWeb | Scoop.it

A new mobile phone payment system announced by 15 major retailers may change the way Americans pay for purchases, but security concerns could make the exchange a hard sell.


The retailers, which include Walmart, Best Buy, 7-11, CVS, Publix and 11 others, announced Tuesday that their Merchant Customer Exchange will allow customers to pay and receive deals at their stores, with more participating companies to be announced in the coming months.


The exchange hasn't released all the details of its new system, but a spokesman for the group said it will make "shopping less expensive."


The retailers account for $1 trillion sales, according to the exchange.


Other mobile payments systems allow users to input their credit card data into an app on their smart phones. Many merchants have scanners at checkouts which allow users to wave their smart phone with its identifying bar code or identification number to make purchases.


Previous breaches at the point of sale for TJ Maxx beginning in 2005 show how large and costly any problems with payment systems can be. TJ Maxx offered its affected 45.6 million customers who had their credit and debit information stolen credit monitoring and paid up to $24 million in a settlement with MasterCard. Michael's, which is a member of the new exchange, had its own security breach in 2011.

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