How Developers Can Secure Mobile App Wallets for Peer-to-Peer Payments

Digital wallets are no longer just an alternative; they have become a key pillar of global commerce. In 2023, these platforms processed an astonishing $13.9 trillion in transactions, representing half of all online payments and 30% of point-of-sale consumer spending. By 2028, this figure is expected to surge to $25 trillion, underlining the growing dominance of digital wallets in both e-commerce and in-person transactions.

One of the key drivers of this growth is the rapid adoption of peer-to-peer (P2P) payment solutions. Apps like Venmo, PayPal, and Apple Cash are making money transfers simple and instantaneous. The benefits that make P2P payments so appealing, like convenience, speed, and accessibility, are the same factors that make them attractive targets for threat actors. Consumers enjoy the ability to transfer money instantly to friends or family with just a few taps. Unfortunately, this simplicity also makes it easier to exploit app vulnerabilities and intercept transactions. A 2023 report by J.D. Power found that approximately 8% of banking customers fell victim to scams involving P2P payments, underscoring the rising threats associated with this popular payment method.

To provide the best experience while protecting the transaction with the highest levels of app security, mobile app developers of digital wallets must implement robust security measures to mitigate these threats, maintain compliance, and foster user trust.

Key challenges faced by digital wallet mobile app developers

Based on insights from industry leaders, Guardsquare has identified several recurring challenges mobile app developers face when building secure mobile app digital wallets. These obstacles can be categorized into three critical areas:

Compliance with central bank security guidelines and PCI DSS standards

Global regulatory frameworks vary significantly, with strict guidelines enforced by central banks and financial authorities. Non-compliance can lead to launch delays, hefty penalties, or even bans from operating in certain regions.

For example, Guardsquare works with a FinTech in the payment sector in South Asia that was developing a mobile application for both Android and iOS. The company needed to comply with security and regulatory requirements set by their country's central bank to obtain a license to operate as a mobile banking app. Specifically, the central bank required them to implement safeguards against potential threats such as malware attacks, device rooting or jailbreaking, reverse engineering, and API vulnerabilities.

Another critical regulatory standard in this space is compliance with the Payment Card Industry Data Security Standard (PCI DSS), which is essential for managing sensitive payment data. However, achieving and maintaining PCI DSS compliance can be resource-intensive, requiring substantial technical expertise and financial investment. Failure to comply not only risks financial penalties but also potential reputational damage.

As an example of aligning with regulations, we work with a technology provider that contacted us because they were building an SDK for consumer mobile apps to enable tap-and-pay functionality. The SDK must ensure the security of sensitive data, such as card tokens and cardholder information, while protecting the software running on mobile devices. Additionally, the company needed to ensure that the SDK was compliant with security standards like EMVCo and PCI DSS and was fully compatible with the main credit card networks.

Qualification processes for payment networks

Collaborating with payment networks such as Visa or Mastercard requires passing rigorous qualification processes. These procedures ensure credibility but can delay time-to-market without proper preparation.

An example of this scenario is a financial services provider we now work with. This customer was striving to meet the stringent requirements for a certification process tied to their mobile wallet solution. Prior to engaging with Guardsquare, the organization had invested in a DIY security solution to pass certification; however, their product launch was delayed when their solution failed to pass the qualification process. As a result, their banking partner chose not to proceed with the release until the non-conformities were resolved.

Managing fraud and chargebacks

Fraudulent transactions and chargebacks are a major source of revenue loss for digital wallet platforms. Without robust fraud prevention mechanisms, developers risk leaving their applications exposed to repeated attacks, eroding both profits and user trust.

An example is a leading digital payments provider that had been using a commercial solution that only provided a basic protection to their mobile payment app. Their initial approach proved to be unreliable against sophisticated attacks that exploit vulnerabilities in their underlying code, as evidenced by an increase in fraud cases. That solution acted as a single point of failure in their mobile app protection strategy; when breached, the entire app logic was exposed to malicious actors.

While the challenges above demonstrate the complex landscape that digital wallet mobile app developers face, they also highlight how taking proactive mobile app security measures can mitigate risks and ensure compliance. In the next section, we outline practical recommendations for overcoming these obstacles and building secure, compliant mobile wallet apps.

Key strategies to secure digital wallets

Securing digital wallets requires a multi-layered approach that prioritizes the protection of sensitive user data and defends against evolving cyber threats. Below are some of the most effective strategies developers can implement:

Make mobile app protection a core component

Security should be embedded at the heart of the app’s design rather than treated as an afterthought. This begins with implementing robust defenses against reverse engineering, tampering, and malware.

Code obfuscation is an essential technique that transforms the app's source code into a format that is difficult to understand, even if accessed by attackers. By making the code indecipherable, it protects the app’s internal logic and intellectual property, significantly reducing the chances of reverse engineering.

Runtime application self-protection (RASP) further strengthens the app by monitoring its behavior in real time. This technology detects and neutralizes malicious activities, such as attempts at code injection or debugging, as they happen, ensuring threats are addressed before they cause damage.

Malware protection is another critical layer of defense. Digital wallets often become a target for malware designed to intercept data or perform unauthorized transactions. By identifying and blocking malicious software attempting to interact with the app, developers can safeguard sensitive user information and financial data.

Integrate security into development workflows

Security cannot be a one-time task; it needs to be woven into the app development process from start to finish. Continuous testing and proactive vulnerability detection should be a standard part of every developer’s workflow.

Regular testing during each development stage ensures vulnerabilities are identified and addressed before they make their way into production. Automating vulnerability detection with tools that provide actionable recommendations can further streamline this process, reducing the time and effort required to secure applications while minimizing human error.

Proactively monitor for threats

Ongoing monitoring is critical to maintaining the security of digital wallets after deployment. Real-time threat monitoring systems can detect unusual activity or unauthorized access attempts, enabling mobile app developers to respond swiftly to potential issues. By keeping a constant eye on potential risks, developers can stay ahead of malicious actors and continuously improve their defenses.

Secure the future of digital payments

Peer-to-peer digital wallets have revolutionized how we handle payments, offering convenience and speed to users around the world. But as this innovation drives adoption, developers face increasing pressure to combat fraud, ensure compliance, and protect user trust.

At Guardsquare, we provide developers with the tools and insights they need to navigate this challenging landscape. From advanced app protection to continuous mobile app security testing and proactive threat monitoring, our solutions enable mobile app developers to build secure, reliable, and compliant digital wallets.

Ready to protect your app and secure payments? Contact Guardsquare today to learn how we can help you build trust and resilience into your mobile payment solutions.