Visa, Forrester: More Mobile Payments, More Fraud Attempts
Scott Adams, as only he could, once described an economic phenomenon: “Wherever there is money, there are weasels, usually in direct proportion.”. While he couldn’t quantify the phenomenon much more—indeed, he noted that someone would one day win a Nobel Prize for calculating the “exact dollar-to-weasel ratio that explains our world”—the essential point remained. A new study released from Forrester and Visa gives this concept a note of credence, suggesting that, indeed, money—and mobile payments—draw fraud.
The report—dubbed “Understanding the Evolving Payments Landscape”—provided a more concrete illustration of the Adams principle, noting that 62 percent of North American bankers, fintech providers, and merchants expect more digital payments to take place within the next two years. Additionally, 46 percent expect that there will be more such options to carry out digital payments, and 47 percent expect more small businesses will get into the action as well.
As the number and type of digital payments options—including, of course, mobile payments—expands, so too will the threat of fraud. The report notes 61 percent of respondents believing that new payment technologies make them more open to potential fraud, and 68 percent were either concerned or very concerned about fraud potential in mobile banking bill payment options.
Mobile payments themselves proved perilous for 60 percent, and 58 percent felt likewise about peer-to-peer payments systems like Venmo. Forrester itself offered recommendations to properly address this fraud, including using tokenization and building in fraud-management systems directly to make potential fraud easier to trace.
To be fair, a new and popular way to transfer cash from place to place was absolutely going to bring potential fraudsters around, the same way that leaving a side of beef outside overnight will draw every fly in a mile radius. As the potential rewards increase, so too do the numbers of those who pursue said rewards. This is basic psychology. The numbers provided, meanwhile, confirm that businesses are indeed paying attention to some of the key points.
The enhanced use of digital payments—mobile payments included—will make for a riskier environment. Since we know this, however, we can take steps to better protect ourselves, whether we’re the customer or we’re the business. Visa and Forrester have given us early warning; all that remains is to see how we use it.