'Cashless India' Still Far-Fetched Without Proper Security

by Moumita Deb Choudhury    May 25, 2017

cashless

With smartphones becoming increasingly affordable and the Internet being offered at lucrative rates (thanks to the service providers’ price battle) while expanding its reach to non-urban areas, digitization at the payments front has seen multifold advancements. Despite that the dreams of digital India are still far-fetched as a major impediment in its path stands out to be security.

The question remains: How ready is India for a cyber and digital driven payment ecosystem?

The recent WannaCry assault speaks volumes about our security loops and the need to up the ante for cyber security. India was among the countries worst affected by the WannaCry attack, according to data shared by Kaspersky Lab.

Read More: WannaCry Effect: Is India Ready For More Attacks?

Altaf Halde, Managing Director, Kaspersky Lab, South Asia mentioned in a statement, “In our research we found that a large percentage of attacks globally by WannaCry happened in India and the country was third on the total number of attacks.”

In a country where we are still running on older versions of operating systems and majority of the population are not tech literates, going cashless driven by digital may be screwy.

The level of smartness of hackers knows no bounds in this digital era. A video posted on Monday, by Chaos Computer Club (CCC), a German hacking group, shows how it tricked into unlocking the Samsung Galaxy S8’s iris sensors, provided by security firm Princeton Identity. It fooled the device with a cropped picture of a person’s irises and a pair of contact lenses.

At the same time, the big names of the smartphone market are putting their feet in the payment space. Samsung, in March, launched its own payment service, called Samsung Pay in India that are available on select Samsung Galaxy series devices, while Apple plans to launch its Apple pay soon in India.

Read More: Can Samsung Pay Boost Mobile Payments In India?

Google, last week, announced its payment API that can be availed by any android run device and will enable fast checkouts in apps and online, payments with Google Assistant and more. The country’s move towards a cashless economy is also leveraged by e-wallet players like Paytm, FreeCharge and MobiKwik - getting in tune with Digital India’s move towards an intangible monetary system and Telecom Service providers are trying equally hard to tap this market. 

Even banks, be it of public or private sector are on its way to become virtual by going digital. Technologies like Predictive analytics, Blockchain, IOT, Artificial Intelligence, Machine Learning, BOTS and Robotic Process Automation will drive the future of a cashless economy. As Sai Gundavelli, Founder & CEO of Solix Technologies, believes, “The banking sector will see a sea change in the coming few years. As ecommerce players such as the Amazon or Flipkart has changed how the retail industry operates, banking will transform itself completely to become virtual. The very face of banks what we understand today will vanish and banks will only be understood as mobile phones and ATM machines,” 

Read More: Can M-Wallet Answer India’s Demonetization?

Despite the momentum, there is a perceived lack of awareness on the concept. Mobile wallet companies should be more proactive in spreading awareness about their services pan India. An Assocham -RNCOS study suggested that payment companies must develop a common platform for their application to save money and time as this would ultimately result in reduction in cost and expansion in user base and hence revenue. Crystal clear policies and a common regulatory body for all payment systems are required to bring clarity in procedures and policies, it said.

“A strong authentication mechanism must be put in place to bind the identity of the user to the authorisation of the transaction thereby being extremely mindful of authentication and risk assessment,” Assocham Secretary General D S Rawat stated in a statement.

Clearly, cyber threats are more gruesome than physical crime as they are elusive. Therefore, our security walls have to be fortified before we set our milestones for being a cashless economy. The recent cyber-attack has already been a huge dent. Going cashless can only be a boon if a person can stay assured that his monetary assets are and will be safe. If the thought of becoming a pauper haunts every single time a digital transaction is made, then going cashless is certainly a distant dream.