LITTLE ROCK, AR - Busy 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.
"Just wave the bar code device, and the transaction happens instantly," Osler said.
It's already being used in Little Rock, at places like Sweet Love Bake Shop on Cantrell.
You pick out what you want to buy, and simply use your phone to make a payment. No need to take out your wallet, credit card or have a credit card receipt.
And it's that ease of use that has some experts worried.
"None of that is required so that's a huge security risk," Security Expert Hemanshu Nigam said.
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 is in fact the right consumer who has that phone?" Patricia Poss of the FTC said.
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,” Nigam said. “It's gone."
The FTC says before you download a mobile payment app be sure to find out:
- 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?
Another concern: who's tracking your buying habits?
"One of the things we want to look at is what information is collected from consumers, how is it transferred and who actually gets access to it?" Poss said.
Tom does get what he considers "spam" promotional emails from his payment provider, but he loves the loyalty rewards that come with using the app. The day he signed up, he even got his lunch for half price.
And he keeps his phone password protected.
"I feel secure that my device is locked," Osler 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 to help avoid being billed for transactions you did not make.