This year’s holiday shopping season came earlier than ever. And as shoppers gear up to storm their favorite stores, virtual wallets in hand, the problems associated with BYOD security could put a damper on some of that holiday cheer. In a recent interview found on,

Ajay Bhalla, President of Enterprise Safety and Security at MasterCard, discussed three major mobile payment security problems that are sure to plague credit card issuers and retailers this holiday season.


Declining consumer confidence – In a recent survey by, 45% of consumer respondents said that they would either “probably” or “definitely” avoid holiday shopping at stores that had acknowledged computer breaches to credit card data. While no specific stores were mentioned in the interview, Target Inc. is probably top of mind for many shoppers The 2013 holiday data breach that compromised over 40 million credit and debit card accounts has since cost Target hundreds of millions of dollars in lost revenue as it fights an uphill battle to restore consumer confidence.

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 When asked about declining consumer confidence in the interview, Bhalla said that there are a number of surveys indicating consumer confidence is down. Whether that is an issue this holiday season will be determined by post-holiday spending data. Bhalla also cautioned retailers that if they are going to increase consumer confidence they need to be able to reassure consumers that breaches of their data aren’t going to happen.


An “aging system of passwords” – The second mobile payment problem, according to Bhalla, is the “aging system of passwords” that lies within the payments ecosystem. “The amount of applications we use is proliferating and so are the complex combinations of passwords we’re using to access them,” says Bhalla. “It’s a problem in that we forget them, write them down, or use the same password across multiple apps and sites.” Bhalla says that this password problem translates into “abandoned shopping baskets and frustrated customers” which negatively affect the bottom lines and reputations of businesses.


 Increased card declines – Credit card fraud continues to rise, especially in the e-commerce world where there is three times more fraud than in brick and mortar stores. As a result, Bhalla explains that there is a tendency for online merchants to overcompensate, resulting in “false positives” and credit card declines “even when they are genuine purchases.” In fact, Bhalla states that the rate of card declines at the online point of sale is five times that of declines which occur when the cardholder is present in a physical store. While Bhalla did not elaborate on how this increase in credit card declines affects online businesses and their customers, it’s safe to assume a loss of revenue for the retailer and a loss of store loyalty for the shopper.



To remedy these mobile payment security problems, Bhalla endorses a “multi-layered approach to protecting against fraud, which spans all parts of the payments ecosystem, for consumers at the physical and virtual point of sale, the retailers, banks and processors.” For MasterCard, that solution is SafetyNet, a global tool that Bhalla says is designed to identify potential attacks before they start. SafetyNet utilizes big data analytics technologies to spot fraud as it occurs in real time and decline a transaction before any exposure occurs.  


Another solution brought up in the interview is that of “tokenization”. The idea behind tokenization is to replace sensitive payment data with a unique identifier or token that cannot be mathematically reversed. This technology is what Apple Pay is relying on to keep customer data secure.



Bhalla suggests that regardless of the technology being used, payment security requires industry standards in order to keep the information of all cardholders safe. Once those standards are achieved, online shoppers during the holidays and all year round will be more confident and less frustrated when making mobile payments.

~ Rick Delgado