Cybersecurity

When a Wallet Is No Better Than a Ziploc

Many startups aren’t properly securing their users’ data.

Photographer: Artur Debat/Getty Images

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By Olga Kharif

March 10, 2016 at 11:45 PM UTC

This article is for subscribers only.

This article is part of the March 14, 2016 issue of businessweek.

"I am hoping my kids don’t do it," says Sarah Jane Hughes. The Indiana University at Bloomington professor of commercial law isn’t alluding to sex or drugs. She’s talking about the dangers of mobile payments services, a subject that brought her to Capitol Hill in December for a congressional hearing. She’s not the only one sounding an alarm: In September almost half of about 900 members of Isaca, an association of IT professionals and risk managers, said mobile payments aren’t secure.

In 2016, 148 million people around the world will reach for their handsets to make payments at in-store point-of-sales terminals, according to a report from Juniper Research. Many millions more will use payment apps such as Dwolla or Venmo to send money to friends and businesses.