Is my credit card information safe on my phone?

A person holding their smartphone to a store employee's payment reader.

Image source: Getty Images

As if losing your phone wasn’t already scary enough.

the main points

  • Data for 2021 shows that 85% of Americans own a smartphone, and mobile wallet technology means more and more people are using it to pay for purchases.
  • Mobile wallets generate a unique encrypted credit card number for the payment processor to use, while keeping your actual number private.
  • Consider keeping your phone (and therefore your financial data) safe.

The vast majority of Americans have a cell phone. Pew Research data from 2021 shows that 97% of Americans do this, and 85% of them have smartphones. It’s kind of amazing how quickly mobile technology has advanced and we’ve all joined in on it; Like many people, I would be lost without my smartphone.

This phone mania has also led many people to use mobile wallets to make it easier to pay for purchases. Gone are the days when you had to carry around a physical wallet with your credit cards and cash in it to pay for things. Now you can hold your phone on the checkout reader and be on your way. It’s very easy to put your credit card information on your phone to Apple Pay, Google Pay, or any other mobile wallet. But how do these apps work?

How do mobile wallets work?

If you’re one of the 85% of Americans who own a smartphone, chances are it has a mobile wallet app built into it. These are fairly easy to set up – you’ll be asked to enter your card numbers, expiration dates, CVV numbers, and information. You may have to verify card information via two-factor authentication. This is for your protection and to ensure that the person who stole your credit card information can’t just add it to their mobile wallet without some additional actions (like accessing your email or mobile phone number).

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A really nice feature of mobile wallets is that your actual credit card number will not be sent when it is used for payment. Instead, your mobile wallet will generate a unique encrypted number instead, saving you from having the scraper built into the credit card reader capture your credit card number. The cashier won’t know your actual credit card number either. This is one of the ways your credit card information is kept secure on your phone. But will you have to worry about other safety issues?

Are mobile wallets secure?

Nothing in life is completely without risk, but the aforementioned features make mobile wallets very secure. Not only will a thief have to steal your phone, but he’ll also be able to access the data on it, and if you set up your phone with facial recognition, fingerprint access, or a good old fashioned passcode, your data is safe. (And you can remotely erase this data if you ever lose your phone.)

And remember, you don’t even have to have a credit card to use to pay for your purchase, which reduces the chances that your physical card will be stolen (or accidentally left at the store or restaurant where you use it). You might get as far as to stop carrying your credit cards altogether, but I wouldn’t necessarily recommend that.

Mobile payment technology isn’t universally adopted, and there are still many places that aren’t able to process payments like this, so you’ll need that physical card. However, it’s a good idea to keep credit cards that aren’t your “daily driver,” so to speak, in a safe place at home. For example, I don’t use my travel credit card often, so I don’t keep it in my wallet; Whereas, I use my grocery rewards credit card at least once a week, so it stays in my wallet.

What can you do to keep your data safe?

It is very important to keep your smartphone safe if your credit card information is on it, and as such, it is worth reviewing the steps to know what to do if you lose your phone, which are:

  • Try to find it before you panic.
  • Remotely erase your phone data.
  • Contact your carrier and the police.
  • Change your account logins and monitor your financial accounts.

The FCC has provided some other tips for the safe use of a mobile wallet:

  • Don’t leave your smartphone visible or unattended, like in your parked car.
  • Watch your surroundings and be careful when using your phone.
  • Do not use mobile payment services over unsecured wifi.
  • Always choose unique passwords.
  • Keep a close eye on the financial accounts linked to your phone.

These are all great tips for general smartphone and financial security, and they’re worth following. We live in the future, and while technology has made our lives easier, it’s important not to feel complacent. Keep your phone safe and private to keep your credit card information safe too.

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