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Customer Concerns about Mobile Payment Security

As we continue to delve deeper into the Digital Age, new products and services are
introduced that strive to push the envelope further. Social media, online banking and
electronic health profiles are just a few of the advancements that have had an impact on the
way people are managing their lifestyles online.

While more and more consumers maneuver their lives in this customer-not-present
environment, ensuring information privacy and shielding customers’ identities from misuse
becomes a defining factor in what makes a business successful. According to IDology’s
2013 Fraud Report, 66% of surveyed organizations experienced suspected fraud attempts in
the last 12 months. 36% of respondents noted that these fraud attempts had increased.
Because of this, protecting customers’ identities has become a #1 priority for organizations
as identity theft and fraud continues to rise.

Fairly recently, organizations have begun offering their product and/or service on mobile
devices – for example, there has been a more widespread implementation of mobile
payment services. However, the mobile environment brings a whole new set of challenges in
relation to security. On the one hand, mobile payments users spend nearly twice as much
through digital channels overall than people not buying on mobile devices. However,
concerns over security, privacy and convenience keep 80% of consumers from changing
their payment behavior and using mobile payments.

With people becoming more comfortable sharing personal and financial information online
and on their mobile device, it is more important than ever for both consumers and
businesses to work together on security and the protection of consumers’ identities through
innovative technology solutions that enable robust identity verification and fraud prevention.

Vulnerability of Information

Fraudsters continue to search for and find new ways to gain access to personal data.
Emails, social media profiles and banking sites are vulnerable to a cyber attack and raise
concerns among consumers. Fraudsters can also simply purchase a legitimate identity from
the black market.

If a financial account is accessed by a criminal it can lead to negative effects that extend far
beyond one website. Users may recycle passwords for multiple accounts online and one
security breach can result in a domino effect that leaves a trail of headaches in its wake.

When it comes to mobile phones, the risk seems to amplify. NQ Mobile, smartphone security
software provider, reported 65,000 new malware threats released worldwide in 2012 – up
from 24,000 in 2011 – and that number is only rising. Fraudsters have been able to take
advantage of security holes within mobile apps as well as the lack of technology
standardization to steal legitimate customer information from mobile devices and use it to
defraud businesses of all shapes and sizes.

21 Cyber Warnings E-Magazine – July 2014 Edition
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