7-Eleven Japanese customers lose $500,000 due to mobile app flaw

The operator of 7-Eleven convenience stores in Japan said hundreds of customers who used its new mobile payment service had lost about 55 million yen ($510,000, €450,000) due to unauthorized access of their accounts, local media reported.

The problems arose after the operator, Seven & i Holdings Co, launched the smartphone payment service "7pay" at over 20,000 stores across the country on Monday, the Japan Today news website reported.

Seven & i Holdings said possibly 900 of around 1.5 million registered "7pay" accounts had been accessed without authorization.

It has already suspended accepting new users or allowing users of the service to add money to its smartphone application.

The cause of the security breach is still under investigation, but Seven Pay officials said there were signs of illegal access from abroad, the Asahi Shimbun reported.

According to Seven & i Holdings, some customers reported their losses on Tuesday and unauthorized access from China and other locations outside Japan was confirmed, the Japan Times wrote.

Using the app, users deposit funds into their 7pay accounts from registered bank accounts or credit cards.

When they buy items at Seven-Eleven convenience stores in Japan, they show their smartphone displays with the bar code. Once the bar code had been read, the transaction is finished.

The Asahi Shimbun reported that the system may have been breached by hackers who had somehow obtained user IDs and passwords for 7pay accounts.

Once they had accessed an account, they could have taken large sums of money from the user's credit card.

According to the Japan Times, there is a possibility that the personal information of the around 1.5 million registered users might have been accessed, including email addresses and birth dates.

President of Seven Pay Co Tsuyoshi Kobayashi apologized to users and told a press conference in Tokyo that the company will compensate users for the losses caused by fraudulent access.