Who's In Your Wallet? Exploring Mobile Wallet Security

The rise of mobile wallet apps like Apple Pay, Google Pay, and Samsung Pay has made it easier for smartphone owners to pay for goods and services without touching a payment terminal. But as researchers found, some inconsistencies could make it easier for cybercriminals to commit fraud on stolen devices.

Tim Yunusov, a senior expert with Positive Technologies, says these inconsistencies specifically exist in contactless payments for public transportation, as seen in major public transit systems in places such as New York City and London. Yunusov and his research team were able to defraud devices, using stores around the globe, without the phones ever leaving their owners' pockets.

The team has been exploring different aspects of mobile payment security for years, but their goal for this research was to determine whether it's possible to make payments on a phone if it's stolen or lost and then picked up by a fraudster. Two years ago, when they were researching Visa cards and closely looking at Google Pay, it was the only mobile wallet that allowed payment on locked devices, Yunusov says. Everything else required a PIN or fingerprint.

In the past two years, however, a lot has changed. One factor has been the use of smartphones to pay for public transit because, as he points out, it's inconvenient for every rider to unlock their phone before going through the gate. Apple and Samsung introduced a transport scheme in which people didn't need to unlock their phone to pay for a public transportation system.

This made Yunusov curious. Would it be possible to bypass security mechanisms and use this feature for fraudulent purposes? Mobile wallet providers claim to protect cardholders and their payment details because they don't disclose the information of the original card, but he wondered whether there might be a way to sidestep their protective measures.

Compounding his interest is the popularity of lost-and-stolen fraud, which he says is among the most popular types of fraud affecting modern payment cards. In these attacks, when people lose a phone or card, there's a gap when the card isn't yet blocked during which fraudsters can buy goods and services. Modern EMV contactless cards and mobile wallets, as well as their predecessors, don't allow one to clone a payment card, motivating attackers to steal them. 

"Therefore, the main goal for fraudsters probably would be to use stolen devices or cards for payment fraud," Yunusov says.

Hacking at the Tube
Conducting the research "was kind of a journey," he says. Normally, the team buys the devices they need to do their research and does their work at home or in the office. In this case, because he was researching contactless payments for public transportation, his research brought him into the London tube station.

"To carry out most of the checks, I personally had to go to the London metro basically every day, trying to collect all the data and find a way to bypass security mechanisms that were implemented in Apple and Samsung Pay in order to find an answer to the question," he says.

Six months to a year later, the team found inconsistencies in contactless payments for public transport that lead to potential fraud on lost or stolen mobile phones. Their findings specifically relate to Apple and Samsung; Google Pay doesn't yet have a specific transport scheme. 

Yunusov will share more details about the process in an upcoming Black Hat Europe talk, "Hand in Your Pocket Without You Noticing: Current State of Mobile Wallet Security." The goal, he says, is to highlight some issues with contactless payments in hopes of improving their security.

For those who use mobile wallets, Yunusov advises locking all cards attached to them as soon as they realize their phone is lost or stolen. Keep an eye on what's happening in notifications and transactions and stay alert for suspicious activity.