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Keep your money safe: Are mobile payment apps secure?

Sept. 15, 2020 • 9 min read

What we'll cover

  • The definition of mobile payments

  • The best apps for mobile payments

  • The security of mobile payment apps

Have you ever lost your wallet? We’re all familiar with that feeling of sheer panic in the moment and the subsequent hassle of replacing all of that cash and lost credit and debit cards along with your ID. Wouldn’t it be nice if you could keep track of fewer cards or cash? Well, a mobile wallet-enabled lifestyle can be yours, thanks to mobile payment apps and certain P2P transfer apps.

But questions still surround these digital payments. Are mobile payment app systems safe and secure? Let’s break down the mobile payment app world, the leading developers, and security algorithms to help you make an informed decision.

What are mobile payments?

Mobile payments (which encompass mobile payment apps and mobile money transfers) are generally regulated cash transactions for goods and services or sending money to friends and family that occur through a mobile device such as a phone, tablet, or smartwatch. Instead of traditionally paying for stuff with physical cash, checks, or credit and debit cards, mobile payment technology allows you to do so electronically.

Mobile payments can be used when paying other people (a.k.a. “peer to peer”), at a brick-and-mortar business, or even with online retailers.

Some mobile payments are completed using technology that’s already implemented into your mobile device (Apple Pay and Samsung Pay) or, in some cases, utilizing mobile browser integrated payment systems (like PayPal). But some of these payments are made using separate apps that you download to your devices.

How do mobile payment apps work?

The inner workings of this technology varies from app to app. Typically, they’re securely connected to your bank account or credit and debit cards, effectively creating a mobile wallet.

Some apps like Google Pay are more versatile and provide contactless peer-to-peer transfers and credit and debit card integration (where, after some initial setup, you can use the app in place of the physical cards).

Apps like Venmo or Cash App also allow you to transfer money to people regardless of their location. And some, like Xoom, can even be used to send money to friends and family globally.

The technology that makes mobile payments possible varies from app to app, and the type of transaction you’re making. Some use Near Field Communication (NFC) or Bluetooth technologies for in-person retail payments. These contactless transactions require two participating devices (like your smartwatch and the digital terminal) to be near each other to exchange data.

What security is behind mobile wallets?

Many security experts consider mobile payments safer than card swiping at a terminal or entering in your card number when checking out online, because they use advanced dynamic encryption and tokens to mask your account numbers during the process.

How do these security measures work? Advanced dynamic encryption adds a layer of security by changing the encryption algorithm each time a transaction is performed.

In layman’s terms, every financial transaction relies on a key (i.e., a password) and cipher that decodes the encrypted data. In a typical encrypted transaction, only your key changes. But with advanced dynamic encryption, the key and cipher both change.

This active randomness makes it hard for a would-be fraudster to spoof since both the key and ciphers are moving targets.

Digital tokens work similarly by replacing your primary account number (PAN) with a randomly generated series called a “token.” These tokens can then be transmitted across the internet and various wireless networks as a payment processes without any exposure of your actual bank account or credit and debit card details to unauthorized eyes.

In addition to these two advanced security implementations, some apps also offer two-factor authentication (2FA), facial recognition, or fingerprint identification for transaction verification.

As for peer-to-peer payment apps, security greatly depends on the app in question. While they make things like splitting the check much more convenient, be mindful that you're sending money to the correct person, as apps aren't always able to reverse misdirected payment. While a study from Consumer Reports  found P2P apps to be generally safe, it's good to check and double check when you're sending money directly to another person.

Are mobile wallets or payment apps safe to use?

This combination of technologies creates a much more formidable security firewall than traditional card swiping, check writing, or cash exchanging allows, but that doesn’t mean that they are hacker-proof. Like any new product that’s consistently improved, criminals can exploit security flaws and vulnerabilities.

And since no internet-based system is invulnerable to cyber scammers, you need to consider implementing the security features available to you when choosing a mobile payment app. This roundup of our best tips to help protect you from cybercriminals is an impactful place to start your cybersecurity journey.

Staying protected when using mobile payment apps is all about being proactive. These tips and processes (when available) will help you keep your digital finances in order:

  • Implement two-factor authentication.

  • Enable facial recognition or fingerprint recognition.

  • Only send money to and receive money from people you know.

  • Use a safe and trusted payment app.

  • Keep your passwords

  • Be aware and monitor your accounts.

How do you choose the right mobile payment apps for you?

You have options when it comes to building out your mobile wallet and choosing P2P transfer apps. When picking the right mobile payment app for you, you’ll want to consider these crucial factors:

  • The kind of mobile device you have and its operating system

  • Transaction fees

  • Whether you wish to pay merchants (online and off) or send money to friends and family

  • Location (some apps remain unsupported in certain countries or stores)

  • Security and authentication features

What are the best and most popular mobile payment apps?

The above elements are helpful when choosing the mobile payment app that’s best for you. But with all the choice and competition out there, deciding which app hits all the right marks can be tough.

So, to make your life a bit easier, we’ve compiled a list of a handful of mobile payment apps and their capabilities and feature sets (which are not all the same), so you don’t have to.

Take note: Some of these apps may include a fee for certain types of transactions, like credit card, while other transactions are free.

Apple Pay and Apple Pay Cash

As mobile payments become more mainstream in the United States, Apple Pay continues to be one of the easiest to use and most widely accepted services. It comes pre-installed on most newer Apple devices, and recent updates have introduced compatibility with gift cards, boarding passes, and e-tickets.

Utilizing NFC technology (and anonymized digital tokens), Apple Pay allows users to make payments to merchants securely in person, in iOS apps, and online. Apple Pay Cash is for P2P payments and is only compatible with iOS devices, so you’re out of luck if you’re hoping to send money to an Android lover.

Google Pay and Google Pay Send

Another widely accepted NFC-based mobile payment app, Google Pay (formerly Android Pay), allows users to make payments to a merchant via an Android-compatible device. Conveniently, it stores gift cards, loyalty programs, boarding passes, and e-tickets, so everything is in one place.

Google Pay uses a form of digital tokens and several other security layers. If you want to send or receive person-to-person payments, you can utilize the in-app Google Pay Send.

Samsung Pay

Samsung Pay boasts the versatility of compatibility with any digital sale terminal, including even conventional swipe machines, which makes for a more widely accepted network. It’s supported on all Samsung phones and Gear 3 watches and includes person-to-person payments. The platform also gives five reward points per use.

In addition to being incompatible with non-Samsung devices, the app requires and prompts for a separate pin in most transactional cases, which isn’t as seamless as other platforms.

Square Cash App

If you’re just looking to send and receive payments, the Square Cash app might offer the straightforward simplicity you need. You don’t have to have the app to send money, but you will need to sign up to receive funds and have a bank account tied to your account.

Be aware: The Square Cash app cannot be used at digital sale terminals for online purchases unless you request a separate debit card. Moreover, there’s a $250 sending per week limit (though you can increase these limits to $2500 by verifying your identity).


For its simplicity and easy-to-use interface, Venmo has become one of the most popular money transfer apps out there. It includes features like in-app chat, a payment social media-like feed, the ability to split checks, transfer money to your bank account, and make payments online with PayPal.

Though Venmo works across online, iOS, and Android, it does not support in-store payments unless there’s a Venmo-branded payment button at checkout or, in some cases, may appear if you select PayPal as your payment method.


This PayPal-owned app is geared towards folks looking to send mobile payments internationally. With support in more than 30 countries, Xoom recipients don’t need to download the app — but they must have a PayPal account.

The app boasts compatibility with Apple and Android but keep in mind the $10 payment minimum and that Xoom makes money when it facilitates a currency exchange (in addition to the transaction fee).


Zelle is a quick and uncomplicated payment network created by the banking industry. Zelle requires users to have a U.S. bank account, and it works within the apps of most large banks, including ours (in both Android and Apple varieties).

Zelle allows you to send and receive money with friends, family, and others you trust. Though it generally cannot be used for in-store or online purchases and usage limits are set by individual financial institutions, there are no fees for sending or receiving money (except for those already charged by your bank, credit union, or financial institution). Remember that sending money with Zelle is like sending cash — so the transaction is not protected as a debit or credit card transaction would be.

Now that you’re armed with all this mobile app payment info, you can feel more confident in choosing a platform and, ultimately, in your decision to streamline your wallet. Now all you need to do is keep your phone charged.

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