Mobile Payment Apps: Are They Safe?

Mobile payment apps are new, fast and convenient. But are they safe?

These apps let you pay for coffee, food and other things by just waving your phone at the checkout stand.

But now the feds are taking a closer look at these apps, because of security issues.

Too many people are finding out the hard way, after the fact, that many of these apps don't have enough security passwords.

If your phone is stolen, these apps could cost you more than you bargained for.

There's no signing a credit card charge slip, no getting asked for identification, and while that's quick and convenient it has some experts worried.

Security expert, Hemanshu Nigam says, "None of that is required so that's a huge security risk."

The Federal Trade Commission wants to weigh the pros and cons of mobile app technology to consumers, including what happens if someone swipes your phone.

FTC spokesperson, Patricia Poss says, "How does the retailer know that is in fact the right consumer who has that phone?"

Most apps allow you to set a password to unlock your account. Experts say use it, it's a good idea.

Another good idea: use a credit card instead of a debit card; this way you can dispute the charges.

Hemanshu Nigam says, "When that bank account debit is done, it's an immediate removal of money from your bank. 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?

Patricia Poss says, "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?"

Security experts say if you have a mobile payment app installed on your phone and your phone is stolen, be sure to alert your credit card company, bank or phone company as soon as possible to help avoid being billed for any transactions you didn't make.