Consumers are demanding faster and secure modes of payments against the backdrop of a transcendental digital wave. One such mode that’s particularly catching their fancy is mobile wallets. A wallet that sits comfortably on any mobile or wearable device is increasingly becoming a favorite in the pandemic-hit world, where contactless payments are the need of the hour. It’s quick, simple, and completely in control of consumers.
All one needs to do is install a mobile wallet app, store their card or payment information, and verify their identity via a security code or biometrics.
Mobile wallets do win in simplicity and convenience. But the question consumers often ask is, “How safe are mobile wallets?”
Popularity of Mobile Wallets
Millennials and Gen Z were touted to lead the change for faster and convenient modes of payments. But now, consumers across all age groups are making similar demands. Let’s face it—no one likes slow payments. They can be frustrating and overwhelming for both businesses and consumers.
Mobile wallets seem to perfectly fill this lack. According to a report released by Global Markets Inc., the mobile wallet market will reach $350 billion by 2026.
According to a recent ACI Worldwide (ACIW) report, usage of mobile wallets “rose to a high of 46% in 2020, up from 40.6% in 2019 and just 18.9% in 2018.”
With the increase in smartphone users and the need for customers to go contactless, the mobile payment process must ensure a frictionless and secure end-to-end payments experience.
Fraudsters Targeting Mobile Wallets
Secure transactions and robust verification will play a key role in the success story of mobile wallets. Fraudsters, however, are seeing an opportunity to make a quick buck by exploiting the possible cracks in the system: cyberattacks, system failures, and human errors.
While consumers and merchants are rapidly adopting mobile wallets, fraudulent activities are also rising. According to ACI Worldwide research, “Real-time payments fraud in 2020 include confidence tricks – 13.7%, identity theft – 11.6%, and digital wallet account hacks – 6.2%.”
Though mobile wallets encourage faster and convenient payment methods, they have unlocked potential fraud such as access to card information or account details—putting consumers and businesses at risk.
Fraudsters have figured out ways to work around the systems and steal card information or bank details from users’ accounts. In some cases, fraudsters have easily skipped authentication checks and enrolled cards that don’t even match the user ID details.
The responsibility of ensuring foolproof authentication is pushed to banks. As a result, every institution has its own ways of onboarding a customer. For example, some ask cardholders to send a text with an SMS code, while others request for an e-mail and ask some identity-related questions. But this information can be easily accessed by a scammer through a basic search.
In short, processes like enrollments, sign-ins, and transactions are all susceptible to fraud. But the good news is that these processes can be checked with a strong authentication process that ensures the customer who Possesses and Owns the card is the one who is registering it.
Businesses that haven’t found the ‘right way’ to authenticate their customers will soon find themselves in a vulnerable spot. They will not only risk losing customers but also their reputation. Prove’s Trust Score™ helps businesses reduce fraud, minimize costs, and scale up.
Secure Your Mobile Wallet
Prove’s Possession, Reputation, and Ownership Model™ not only addresses concerns around the right possession but also assesses the real-time reputation of the phone (tenure and behavior) and the ownership of the phone line.
Prove’s Trust Score™, a unique real-time measure of phone number reputation, aims to trump fraudsters by leveraging identity verification and authentication purposes. Trust Score™ analyzes behavioral and Phone-Centric Identity™ signals from authoritative sources at the time of a potential transaction. It basically mitigates fraud, such as SIM swap fraud and other account takeover schemes. In addition to securing mobile payments, Trust Score™ can be used in scenarios such as digital onboarding, digital servicing, and existing customer authentication. With Trust Score™, businesses can ensure latency of <1 second, thus creating a better customer payment experience that is not only fast but also secure.
The future of payments lies in frictionless, quick, and secure solutions. The digitization of payments is now a necessity and not an option. With agility and convenience becoming long-term asks, businesses can only rely on digital means to create a superior CX.