Digital Wallets and Security: Should Your Organization Be Concerned?
This article was updated on July 18, 2018.
People are shifting more and more away from carrying conventional wallets and more toward smart phones as de facto digital wallets. According to FICO's 2015 survey, Millennial Banking Insights and Opportunities, adults 18 to 34 are twice as likely to be using mobile payments as those 35 and older.
With the shift, and the fact that millennials will increasingly dominate your workforce, comes an increasing concern about digital wallets and security. How do you ensure your funds are available, yet still exist behind a secure enough firewall to keep out hackers and cybercriminals. As the proliferation of alternative forms of e-currency grows, organizations of all sizes will need to support and secure the use of alternative methods of transferring payroll.
So what are organizations doing to protect themselves, and what should you consider as the use of digital wallets continues to grow? If your organization issues business phones, for example, how do you ensure mobile payment apps remains secure? Additionally, what can organizations — and specifically HR and payroll departments — do to help employees safeguard their money when they are using those new applications?
A Paradigm Shift in E-Commerce Transactions
Many organizations issue business phones to executives and staff, so the use of an online payment app on a business-owned phone raises new concerns over liability.
For example, Venmo, formerly a peer-to-peer payment app owned by Pay Pal, recently opened up its payment system to third-party apps and services, according to TechCrunch. The app is quick, easy and trendy among millennials, according to Slate. And it's the ease of use and lack of account activity alerts that can leave users open to hackers and the loss of significant amounts of money.
Whether deciding to ban mobile payments on business phones altogether or working with employees to safeguard their funds, leaders need to anticipate and do their best to prevent cybercriminals from accessing organizational property.
How to React to Digital Wallets
There are number of ways leadership can encourage safety and diminish the possibilities of data breaches. While the following is by no means a comprehensive list, focusing on these four areas should help you lay the foundation for increased employee awareness and overall data security:
- Liability. Loop up with your legal council to determine what, if any, liability your organization might bear. This is a new area of risk for organizations to evaluate, so the creation of best practices is still evolving in the marketplace. Additionally, market rules and regulations are shifting quickly to react to this new form of e-commerce.
- Policies and procedures. Write new e-currency and cyber policies and publish them in your handbook, enterprise intranet and any other place organizational rules and procedures are posted. HR should regularly monitor and update their policies as government protocols and regulations catch up to the growing use of e-currency.
- Communication. Conduct regular communication about your policies on the use of company smart phones and individual liability when using any new apps. Offer preventative measures, such as securing and changing passwords frequently, emptying payroll deposits quickly and avoiding lending phones to others. Conduct in-person and video learning sessions to sensitize your employees to the risks and safeguards they can take to mitigate problems with protecting their money. Additionally, involve your technology team to assist in all facets of procedures, protocol and safety.
- Mandatory security enhancements: The use of two-factor authentication or other encryption methods should be a requirement for employees who use employer-provided devices. HR leadership should also look to partner with technology and finance teams to explore options for the future and to ensure all your bases are covered today.
HR teams should stay abreast of e-commerce applications as usage grows. Additionally, HR should work closely with their payroll provider and banking partners to ensure appropriate processes and protocols are in place on their end. As the technology continues to evolve, the use of digital products will certainly grow and proliferate, especially as early adopters spread the word, or spread the use of the apps.
In the near future, digital wallets and security concerns will grow. With diligence and rigor, HR should be able to stay up-to-date with the technology and react accordingly to support their organizations and employees in using those new products safely.