Analysts and users said retail stock traders usually access an account with a password and then authorize trading within that account, so they aren't sending credit-card information over each connection anyway.
No Great Risk
The brokerages use a variety of measures to secure their transactions. Fidelity, for example, relies on elliptical-curve cryptography. DLJdirect relies on security built by its own 500-person in-house technology company, iNautix Technologies Inc.
"You would think security over wireless trading would be a major concern, but security hasn't been an impediment'' to rollouts of applications, said Dennis Gaughan, an analyst at AMR Research Inc. in Boston. "No security is bulletproof, and every [brokerage] has to determine whether the return from the application is worth the acceptable risk. And brokerages have defined the risk as not being that high."
"Security is better on the wireless Web than the wired Web because wireless devices such as cell phones are inherently more secure than PCs," said Ditmore. "Whereas your PC has no serial number that's accessible outside, your cell phone can't be overtaken and has a serial number and you know its location and it authenticates itself to the network. So it is far more secure than a PC."
Schwab's Topakas said that even the device itself isn't particularly vulnerable. "If something happens and I lose it, then I just disconnect the service," he said.
And as some brokerages consider adding new wireless services that are more information-based, the need for security may diminish.
"Trading is just a very small component" of what users want, said Ferra. The rest of them use wireless technology for alerts about market conditions and to get quotes and read-only access to portfolios.
Fidelity envisions going well beyond those services.
For example, it may allow consumers to make 401(k) fund transfers and to arrange hotel, rental car and insurance services with its subsidiaries.
"Our mission statement is to enable wireless access to Fidelity enterprise data, anytime, anywhere, on any device," Ferra said.