The explosive growth of mobile commerce brings with it unique challenges and opportunities for payment players. As more transactions are routed through mobile devices and tablets, what are the key fraud issues affecting the mobile channel?
EDUCATION ALONE IS NOT ENOUGH
Introduction by Pat Carroll, CEO Validsoft
At a roundtable event organised recently by the Payments Cards and Mobile team, and attended by a number of payments and mobile specialists, I was struck by how the subject of identity theft has gone from being a niche occurrence problematic for a few to a genuinely mainstream concern. And not only for security officers and banks, but for mobile service providers too. One of those in the room volunteered that it was the one thing keeping him awake at night.
There are a number of challenges in securing the mobile channel. The smartphone is powerful, but a far less sophisticated environment than a PC, so it’s already easier to exploit. There is very little collaboration happening in the industry, meaning it’s often not clear exactly where responsibility for better security lies. One of the main challenges, however, in combatting identity theft, is the consumers.
There is a lot of talk about the need for better education of consumers, but while the industry has a responsibility to continue educating, education alone is never going to be enough to cure the problem. The reason? Because no matter how low you set the bar, some people will continue to hand over personal information to virtually anyone who asks for it. This leads to fraud in a number of different formats, and as the mobile payment experts in the room at the roundtable explained, it’s already causing them a major headache.
The only answer is to use technology to make sure both the consumers and the organisations providing the service are protected. The technology already exists to do this. It is mobile-based, works in real time and takes a multi-layered approach while not impacting customer experience.
The future growth of mobile payment volumes is assured. Analysts estimate that $670bn of such payments will be made by 2015, but unless the security of those payments is considered from the outset – by design – I predict there’ll be plenty more sleepless nights between now and then.