Are e-Wallets As Safe As People Say?

e-Wallets have been around for quite some time now and have proven themselves a very convenient tool for payments and purchases. However, some may yet to be entirely convinced about the benefits of e-wallets, especially with regards to e-wallet’s safety and security.

This is understandable, as e-wallets also offer another avenue for savvy hackers and cybercriminals to steal your financial data. So just how safe are e-wallets to use today?

Common security threats to e-wallets

Generally speaking, e-wallets are quickly gaining popularity around the world, and Malaysia is no different. Many retailers and shops now accept some form of contactless payments, and even some pop-up and street stalls do so as well. If there are still some businesses that have not yet upgraded to the new technology, there is a very good chance that they will do so in the near future.

Of course, with the rise of digital platforms, malicious actors are sure to follow. Hackers and cybercriminals are always looking for ways to access your data, and e-wallets certainly are another avenue for them to do so.

The threats against e-wallets are growing, and consumers need to be aware of the risks of using digital wallets and learn ways to improve their digital security.

Data transmission

One of the biggest threats to e-wallets is arguably the transmission of data across unprotected mobile networks. These networks are typically not as secure as a properly built LAN (local area network) network. If proper measures are not taken, hackers can hijack the payment information being transmitted.

The most common form of these are known as man-in-the-middle attacks. Hackers will get in between your mobile wallet and its server over the public wifi by intercepting a communication between two systems. If communication between your mobile wallet and its server over the public wifi is intercepted, the hacker can pull credentials and other confidential data they will then use to access accounts and fraudulently transfer funds.  

The good news is that e-wallets typically utilise some form of encryption, so this threat is often minimal. One of the best things you can do is to not use your e-wallet on a public wifi network.

Cloned apps (trojans)

e-Wallet customers have to stay vigilant as there are quite a few mobile wallet clones in the market that look similar to legitimate apps that provide secure payment options. However, when the user tries to make payment on the mobile wallet clone, bad actors harvest the credentials the user enters to fraudulently transfer funds from the user’s actual account. These apps may also have relatively poor security, allowing fraudsters to get permissions for themselves and get access to confidential information. 

Sellers aren’t safe from this either. Fraudsters have used fake mobile wallets to walk away with merchandise they didn’t actually pay for. So if you are a business owner or have a sidegig that utilise e-wallets for payments, be aware of this potential security risk.

Phone loss or theft

Another massive security threat is the loss or theft of your phone. A smartphone is essentially a mini computer and can store a huge amount of your personal and financial data. If you have not locked your phone or you do not have any two-factor authentication set for your digital wallet, then a thief can easily access the information and make a number of purchases or even withdraw money from your bank account before you have time to act.

Scams

Scammers are everywhere in today’s digital world; and unfortunately, is one of the more common ways that your digital and financial security gets compromised. Scams can come in many forms, such as phone call scams, false rewards or business opportunities, phishing emails, and more. 

The recent e-Tunai Belia Rahmah issue serves to highlight the potential danger of digital scams even more. Scammers took the opportunity to advertise withdrawal services for the cash being handed out for this program. This resulted in many beneficiaries being scammed out of their money, or worse, having their confidential information compromised.

Protecting your e-wallet

As mentioned previously, e-wallets tend to come with built-in security measures. However, there are a few extra steps you can take to ensure you are protected as much as possible. These include:

Locking your phone

The most significant risk of using an e-wallet is failing to protect your phone’s data. Use your phone’s provided secure options to lock your phone and do the same for your e-wallets and other essential applications containing private data. More security measures add tedium, but it is well worth the security it offers.

Monitor credit card and bank activity

Make a habit out of going through your credit card and bank account activity at least once a week. If you notice suspicious charges, you must contact your bank immediately and freeze your financial account.

Install security apps

e-Wallets can carry a lot of financially sensitive information. As such, you will want to make sure that your phone is as secure as possible. Install security apps that further protect the data on your phone and also provide you with location services in case your phone gets lost or stolen. Having the option to remotely delete information on your phone if you cannot retrieve it is also useful. Almost all the computer security software brands that you are familiar with such as Norton, Bitdefender, and McAfee also have mobile security software for Android and iOS.

Avoid scams

As mentioned previously, scammers are a dime a dozen in today’s always online world. Be it in the form of a phishing email, or a scam caller, you will have to be ever vigilant for malicious cybercriminals. Try not to open any emails or answer any calls from addresses that you do not recognise, especially if you are using your smartphone to do so. Also, comply with requests to transfer money for an even greater reward. If a deal sounds too good to be true, it likely is so. 

Some scammers might even try to impersonate legitimate organisations to get you to reveal confidential information. Don’t accept any offers straight up and always contact said organisation directly to see if such offers are legitimate.

Vet the sites you use e-wallet on

Not each site that accepts e-wallet payments is trustworthy. Certain sites that accept digital payments can be phishing scam sites. Most anti-malware solutions track these sites, but it is also recommended to perform your own background checks. If the offer looks too good to be true, or there are some strange payment conditions, it is likely better to go shopping elsewhere.