New apps are making it possible for consumers to ditch their wallets and credit cards and instead pay for items using their smartphones.
But some people question whether the risks are worth the convenience.
Starbucks created an app that stores credit card information right in your phone, turning it into a virtual gift card.
Google Wallet enables you to store multiple credit cards on your smartphone. It's only available in the U.S., but plans are in the works to launch it in Canada are on the horizon.
Although these apps can make your shopping experience easier, IT security expert Michael Legary said they easily expose your personal financial information to hackers.
"I can clone the SIM, so I can clone your phone number," he said.
Devices exist that can read the information stored in a smartphone, including credit cards.
Legary also worries that consumers may not be aware of the data trail they leave behind when using these apps.
"Now you're giving additional information to Google or Starbucks or whoever your application's through,” he said. “So you've got to ask yourself, ‘Did I want to give that information up about what I'm purchasing to that company, and what are they doing with it?'”
There are ways to protect your personal information. Legary said users should protect their apps with pass codes, learn how to remotely wipe your phone and carefully read the terms and conditions of any app that stores credit information.
The risks involved in using these apps don’t just involve people stealing your information. Christi Posner of Credit Counselling Society said the apps might encourage thoughtless spending.
"When you don't have a plan, when you don't have a limit, it's very easy to reload these cards and this spending can get way out of hand," she said.
Micheal Legary said some Canadian banks have been slowly allowing customers to pay through smart phones. We could see full-scale digital wallet apps pop up in the next few months.
- with a report from Karen Rocznik
