As mobile payment solutions continue to become more widely used, mobile payment fraud is a growing concern. Avivah Litan, vice president and distinguished analyst at Gartner, said on her Gartner blog, fraud in the mobile channel presents looming problems with mobile payments.
Highlights from Ms. Litan’s blog are included below:
For years, we have been briefed by vendors offering a plethora of innovative and strong user authentication solutions for mobile payments and commerce. And for years, we have been asking the vendors touting them how they know their mobile app is being provisioned to a legitimate user rather than a fraudster. That always appeared to be the weakest link in mobile commerce –making sure the app is provided to the right person instead of a crook.
Identity proofing in a non-face-to-face environment is anything but easy, but there are some decent solutions around that can be stitched together to significantly narrow down the population of fraudulent transactions and identities. The key is reducing reliance on static data – much of which is PII data that has been compromised by the crooks – and increasing reliance on dynamic data, like reputation, behavior and relationships between non-PII data elements.
This problem is only going to get worse as more mobile payments solutions are released. The vendors in the mobile user authentication space have consistently answered that they are leaving account provisioning policies to the banks or other consumer service providers provisioning the apps. It’s time for them to reconsider and start helping their client banks and service providers by supporting identity proofing solutions built into their apps. Whoever does this well is surely going to win lots of customer support… and revenue.