Mobile payments fraud to become ‘painful’ in 2017
Research on the digital trends in banking and payments has suggested that fraud in mobile payments could peak in the coming 12 months. The research – Future Trends for Digital Banking and Payments – focuses on 10 key aspects of digital payments and banking, which the researchers say are likely to happen over the next five years.
Digital payments and banking trends 2017-2021
The company that compiled the report, Javelin Strategy & Research, which is owned by Greenwich Associates, picks out three trends for 2017:
- APIs will accelerate financial services innovation;
- banks will diversify their offerings and keep up with the pace of innovation by partnering with strategic fintech players; and
- mobile payments fraud becomes painful.
According to the report, the value of mobile retail payments in the US will exceed $220 billion in 2017 and in addition, the number of person-to-person mobile payments are also rising. Javelin's Al Pascual notes: “Securing the enrolment and use of mobile payment apps will be critical to managing the risk of mobile payments fraud. Unfortunately, criminals’ methods and skills are evolving more quickly than the controls that are being put in place to protect mobile payments and underlying accounts.”
Addressing mobile payment fraud
The report makes three recommendations for handling mobile payment fraud:
- FIs should assess their mobile security readiness against the FFIEC’s Mobile Financial Services guidance;
- strengthen authentication in mobile banking and payments by eliminating passwords and knowledge-based authentication; and
- engage customers by educating them on mobile threats and by offering alerts that empower them to detect mobile payments fraud quickly.
Mobile payments fraud was one of the 10 trends identified by Javelin. The other themes that will shape the financial services sector from 2017 to 2021 are:
CTMfile take: Mobile payments are set to see huge growth in the next few years so making payments over mobile devices safe and secure is a real priority for financial institutiions, regulators and retailers.
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Don’t use public Wi-Fi
Don’t store passwords on your phone
Don’t link to your mobile device to your debit cards
Have a device locator running on your phone