Feds are concerned about the safety of your hard-earned savings and financial information with the latest replacement for cash. They will be holding a hearing soon so consumers know the pluses and minuses.
Accountant Tom Osler barely has time to eat lunch during tax season. To save time checking out, he pays his tab in seconds with a mobile payment app. There's no signing a credit card charge slip, no getting asked for identification.
But while that's quick and convenient, it has some experts worried.
"None of that is required, so that's a huge security risk," said Hemanshu Nigam.
The FTC wants to weigh the pros and cons of mobile app technology to consumers, including what happens if someone swipes your phone.
"How does the retailer know that that is in fact the right consumer who has that phone?" said Patricia Poss.
Some apps allow you to set a password to unlock your account. Experts say that's a good idea, and you're better off linking a mobile payment app to a credit card rather than a debit card because it's easier to dispute purchases.
"When that bank account debit is done, it's an immediate removal of money from your bank. It's gone," Nigam said.
The FTC says before you download a mobile payment app, be sure to find out the following:
- Who can you call if something goes wrong?
- Can you dispute purchases with the mobile payment provider?
- How can you get your money back?
- Does the company provide protection for fraudulent transactions?
- Who's tracking your buying habits?
Osler says he is not overly concerned, but he does keep his phone password protected.
"I feel secure that my device is locked," he said.
Security experts say if you have a mobile payment app installed on your phone and it gets stolen, be sure to alert your credit card company, bank or phone company as soon as possible. Doing so can help you avoid being billed for transactions you did not make.