It might sound breathtakingly obvious to those of use who have lived cheek and jowl with mobile payments for any length of time, but UnionPay recently released a survey that helped quantify our anecdotal truth: mobile payments technology in China has been on the rise, and so too has mobile payments fraud.
Studying fully 105,000 people in the survey, the study found that 60 percent had been hit with some kind of security threat related to mobile payments. That included everything from information leaks to outright attacks on systems. With quick response (QR) code popularity on the rise—we recently spotted Shanghai’s plans to use QR payments on its subway system—fraud involving QR codes is likewise up. Almost 30 percent of those reporting fraud said that QR codes were involved in some way, and that’s up from just 15 percent the previous year.
Users were found to be most vulnerable at the point of opening a new account. Some providers use a mobile phone number for user verification, but this can in turn be used as a point of attack later on. Moreover, older users were more vulnerable overall, with 59 percent of users over 50 noting an attack had take place. While women were attacked more often—about 10 percent more often on average—men were hit with higher-figure losses.
When mobile payments first emerged in the US, people were afraid of exactly this sort of situation. That led mobile payments providers to step up security, and bring in tools like biometric authorizations or two-factor authentication. The result has made our mobile payments life safer overall, though not necessarily perfectly safe. The Chinese, meanwhile, have gotten into mobile payments quite rapidly, and may not have had the period of safety acclimation the US market has had in mobile payments.
The numbers from UnionPay make it quite clear that the Chinese mobile payments market isn’t without its risks. The good news here, though, is that seeing the danger involved in mobile payments might spur a demand for better mobile payments security. Improved security tends to improve a customer experience, meanwhile, and in turn make for more return business in the process.
Ellie Dautner, a finance postgraduate from the University of San Diego, is an expert journalist in fintech and mobile payment technology. She specializes in writing about fintech, mobile payments, startup funding, and acquisitions.