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Let's discuss smartphone payment security

This week’s featured article

KAZUAKI NAGATA, THE JAPAN TIMES

Seven & I Holdings Co. said Aug. 1 that it will scrap its hacked smartphone payment service, just one month after its debut, as it struggles to resolve security issues.

The Tokyo-based retail giant and operator of 7-Eleven convenience stores said it will end the service on Sept. 30, because it will likely take some time to construct a more robust system able to resume all the features from 7pay and that customers’ trust in the service has been shaken.

“We deeply apologize to customers who have trusted us and are using our barcode payment service as well as to all people involved with this service,” said Katsuhiro Goto, vice president at Seven & I Holdings, during a news conference in Tokyo.

The company also said that 808 users had been affected by the ¥38 million hack as of July 31. Seven & I Holdings said it will compensate all those targeted, adding that it has not seen any new cases since mid-July.

The service uses barcodes and QR codes together with a smartphone app. It was launched and was available from 7-Eleven stores on July 1, but complaints of unauthorized transactions started to pour in just one day later.

The firm halted payments loading 7pay accounts with funds from customers’ credit and debit cards on July 3. Currently, the service only enables users to make payments from their existing balance. It is not accepting new users, either.

As for how hackers accessed the system, Seven & I Holdings said it’s highly likely that they acquired lists of IDs and passwords for other web services and targeted those who used the same IDs and passwords for 7pay.

Seven & I Holdings admitted that its security measures for 7pay were inadequate, also acknowledging that its risk management process had failed.

The decision to end the cashless service came just two days after Seven & I Holdings reset all passwords for its 7iD users. 7iD is an online user ID used for Seven & I Holdings’ internet shopping services.

Goto said that its 7iD service maintains an appropriate level of security but that the firm reset the passwords as an extra security measure. He said that the password reset for 7iD and the 7pay situation are different issues.

Although it will terminate the 7pay service, Seven & I said it will consider introducing another cashless service in the future when the opportunity arises and as digital payments become more widespread.

As the Japanese government is heavily promoting the use of cashless payments, the security breach at Japan’s biggest convenience store chain might hinder momentum.

First published in The Japan Times on Aug. 1.

Warm up

One-minute chat about convenient services in the world of technology

Game

Collect words related to online shopping: e.g., money, password, bank, etc.

New words

1) scrap: to get rid of, e.g., “I scrapped the idea of employing three new people.”

2) robust: strong and healthy, e.g., “Protesters delivered a robust response to the police.”

3) compensate: to make up for financially, e.g., “The family will be compensated by the insurance company.”

Guess the headline

Seven & I to scrap 7pay s_ _ _ _ _ _ _ _ _ payment service in Japan after users h_ _ _ed

Questions

1) Why did Seven & I stop their new service?

2) How did hackers likely access the system?

Let’s discuss the article

1) Do you use cashless payment services?

2) What do you think about the hack?

Reference

支払いのキャッシュレス化は国も積極的に取り組む制度ですが、その浸透に水を差すような出来事が起きてしまいました。急速に盛り上がるキャッシュレス市場に参入したコンビニ最大手のサービスは、大きな注目とユーザーの期待をもって迎え入れられましたが、話題性が高かった分その失敗による影響はキャッシュレスサービスのイメージにも影響を及ぼしそうです。

安全で便利なサービスとして広く市民から使われるようになるために、その制度に私たちは何を期待するでしょうか。朝英語の会に参加し皆さんで話し合ってみましょう。

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