M-COMMERCE COMMUTER FRAUD: WHY BUSINESSES AND CONSUMERS MUST WORK TOGETHER TO THWART SECURITY THREATS TO MOBILE PAYMENTS

Srivatsan Srinivasan, product marketing manager at Nexmo, believes consumers must authenticate their phone numbers to keep fraudsters at bay in a market now dominated by m-commerce.

With nearly a fifth of e-commerce activity now occurring on the daily commute, it is no secret that online shoppers will become a more attractive target for fraudsters. Mobile phone purchases are now just one click away after Twitter, Facebook and Google launched their new buy button options, making it easier for consumers to buy on the move. But the rapid rise in mobile payments will have alerted the most enterprising cyber criminals, as they will look to take full advantage of security deficiencies by exploiting vulnerable consumers. The responsibility now passes on to merchants to introduce more stringent phone authentication methods to prevent fraudsters from hacking or taking over shoppers’ accounts.

Balancing security provisions with ease of user experience

Long gone are the days when shoppers would peruse through their favourite online websites at leisure during their morning commute to work, before delaying their purchasing activity until they get back home in the evening. Now it is common practice for consumers to buy on the move as well, leaving the door wide open for fraudsters.

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Average consumer spending has risen from £36 to £44 per week for London commuters, a statistic confirming the staggering transformation in buyer culture. And as this transition from desktop to mobile gathers pace, it is even more crucial that consumers are fully aware of the potential security risks that come with it and, more importantly, how to protect their data from those with criminal intentions.

The big challenge facing businesses now is whether or not they can tighten up their security provisions without compromising user experience. Nowadays, tracking the answer to the account recovery question ‘What is your mother’s maiden name?’ is no longer a difficult task for today’s sophisticated fraudsters. M-commerce maintains a competitive edge on alternative shopping routes because of its direct, easy-access payment facility – a service in danger of being overcomplicated if merchants opt to implement a more impenetrable (yet deeply irritating) alternative check-out system. The questions remains: how do merchants ensure consumer protection without damaging their shopping cart conversion rates? By making sure either they or their payment service provider are using the best practices.

Reinforcing security with stronger phone authentication

The European Banking Authority has strongly recommended that payment service providers must request strong customer authentication to verify consumer identity before shoppers are allowed to proceed with an online payment. Phone number authentication – an easy method to implement and one that requires minimal effort on behalf of the consumer – would be the safest way to confirm a purchase. This would be achieved by the consumer entering a unique password sent to them via voice or text message.  The threat of potential danger can then be further reduced by the phone, which only the consumer has access to, which possesses strong authentication.

Another security provision consumers must consider is whether they are making online purchases on a secure internet connection. Processing an m-payment over an unsecure network, for example a public Wi-Fi zone, would increase the risks of a security breach as fraudsters are likely to track activity undertaken on a network visible to everyone.

Bearing in mind that there are thousands of websites on the internet, some of which are fraudulent, it is important to look at the address bar before making a transaction and look out for the image of a padlock and https at the beginning of the website address. This indicates that the connection is encrypted using TLS/SSL technology, which prevents access of third parties that may be connected to the network and serves as certification of veracity of the site, showing that they are performing a secure data transfer.

The way we use the internet is constantly changing. As businesses look to revolutionise their online shopping service to improve their profit margins, they leave themselves (as well as their consumers) vulnerable to those harbouring criminal intentions. Two-factor authentication and a few simple processes will help consumers safely authenticate their online payments when travelling to work.Websites and social media sites offer businesses the opportunity to stay ahead of the game by providing consumers with a variety of ways to purchase online, but it is on the part of the consumer to shield their identity whilst completing their m-payments. Though responsibility also falls to the merchant who, by paying careful consideration to the security concerns when developing new services, can provide a service tailored toward the consumer’s needs. And by doing so, keep fraudsters at bay.

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