Towards robust security in smart payment systems: challenges and solutions

Smart payment systems, including contactless transactions, mobile wallets, and online payment platforms, have become integral components of smart cities, transforming financial transactions by offering unparalleled convenience, speed, and accessibility. However, the rapid integration of these systems within the broader smart city infrastructure introduces a new array of security challenges that threaten the integrity, privacy, and trustworthiness of both financial services and urban ecosystems. This paper provides a comprehensive analysis of the evolving security landscape in smart payments, examining both existing and emerging threats. We explore vulnerabilities arising from data breaches, privacy violations, fraudulent activities, and weaknesses in underlying technologies such as Near Field Communication (NFC), Internet of Things (IoT) devices, and mobile applications. Specific risks, including phishing attacks, account takeovers, and the exploitation of vulnerabilities in contactless payment protocols, are thoroughly examined. In addition, the paper critically assesses current security measures such as encryption, tokenization, two-factor and biometric authentication, and fraud detection systems. While these solutions offer a degree of protection, they often struggle to keep pace with evolving attack vectors and the need to balance security with user experience, especially in the interconnected environments of smart cities. The limitations of these security measures are analyzed in terms of cost, complexity, and adaptability to emerging threats. To address these challenges, we propose a multi-faceted security approach that incorporates advanced technologies, including AI-powered fraud detection, blockchain-based transaction security, and the development of more robust security protocols. We also emphasize the importance of secure development practices for mobile payment applications and the critical role of user education in mitigating security risks. The paper concludes by identifying future research directions, stressing the need for standardized security frameworks and regulations to foster a more secure and trustworthy smart payment ecosystem within smart cities.