Against the backdrop of a transcendental digital wave, consumers are demanding faster and secure modes of payments. One such mode that’s particularly catching their fancy is mobile wallets. A wallet that sits comfortably on any mobile device or wearables is increasingly becoming a favorite in the pandemic-hit world, where contactless payment is the need of the hour. It’s quick, simple, and completely in control of the consumers.
All one needs to do is install a mobile wallet app, store their card or payment information, verify their identity via a security code or biometrics, and they are done.
Mobile wallets do win in simplicity and convenience. But the question consumers often ask is, “How safe are 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 fill this lack perfectly well. According to a report released by Global Market Insights Inc., the mobile wallet market will be $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, it’s even more important that the mobile payment process meets the end-to-end payments experience that’s not only frictionless but also secure.
In mobile wallets’ success story, secure transactions and robust verification will play a key role. So, while this brings in signs of hope for growth, fraudsters are also seeing an opportunity to make a quick buck. The possible cracks in the system are cyberattacks, system failures, and human errors.
While the pace of adoption of mobile wallets amongst consumers and merchants is rapid, so is the rise in fraud. 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%.”
So, while mobile wallets encourage faster and convenient payment methods, it has also unlocked potential fraud like 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 fact, it's reported that fraudsters can easily skip the authentication checks and enroll cards that don’t even match the user ID details.
This authentication process is pushed to banks to get it right. As a result, every institution has its own ways of onboarding a customer. For example, some ask the cardholder to send a text with an SMS code, while others ask for an e-mail and some identity-related questions. But this information can be easily accessed by a scammer through a basic search.
In short, processes like enrolments, 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 who haven’t found the ‘right way’ to authenticate their customers will soon find themselves in a vulnerable spot. They won’t just risk losing customers, but reputation too. But fortunately, Prove has an answer. Prove Trust Score™ can help reduce fraud while minimizing costs and helping scale your business.
Prove not only helps in addressing the concerns around right possession but also assesses the real-time reputation of the phone (tenure and behavior) and ownership of the phone line. We call it the Prove Possession, Reputation, and Ownership Model™.
In addition to this, Prove uses a unique real-time measure of phone number reputation—Prove Trust Score™. It 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. Trust Score can not only be used to secure mobile payments but also in different scenarios, including digital onboarding to digital servicing and existing customer authentication. With Trust Score, businesses can ensure latency to customers is <1 second, thus creating a better customer payment experience, which is not only fast but also secure.
The future of payments is frictionless, quick, and secure. Digitization of payments is now a necessity and not an option. With quickness and convenience becoming a long-term ask, businesses can only rely on digital means to create a superior CX.