Demystifying mobile payments
Claire Maslen is head of financial services at the GSMA
As mobile handsets become more prevalent as a tool for retailers, for payments, loyalty and engaging with consumers in and out of the store, security of sensitive data becomes increasingly more important. Considerations, such as how applications, tools and technologies use and store data and also how users are identified or targeted become key concerns, writes Claire Maslen.
Research by Intercede found that one in five consumers said they did not feel safe shopping on their smartphone, and 63% said they worry about security on their mobile device. The study also found that safeguarding data against identity theft, should a phone be lost or stolen, is a top concern for consumers.
Mobile Operators should demonstrate the value mobile payments bring to consumers and businesses alike, by focussing on convenience. Consumers are turning to mobile as an alternative to cards and cash and bellow are just a few reasons why.
The Centre for Economics and Business Research found that some forms of mobile payment actually helped to reduce fraud. Mobile devices provide consumers with more control over purchases and the ability to take action immediately should their phone be lost or stolen.
In comparison, the report found that fraud losses on plastic cards stood at £388 million last year, with £68 million of these losses from cards lost, stolen, or intercepted in the post.
Secure mobile payment systems and other similar payments requiring PIN identification can reduce this type of fraud. The US is moving away from signatures to using PINs instead.
It’s important that customers and retailers alike understand the benefits of mobile and the security provisions within the technology.
This means knowing, understanding and articulating that the mobile technologies they are using are backed by international bank grade security standards – which meet the most stringent global security standards.
In addition, the infrastructure, including the installation of payment applications in the SIM are designed in union with the finance industry and using the SIM doesn’t require retailers to store consumers’ card credentials.
Consumers are set to only increase using their mobile devices for shopping and every-day transactions. IMRG and Capgemini found that 27% of all online sales, worth £3 billion, were placed using a mobile device.
This is directly linked to the amount of personal and sensitive information now located on mobile devices, and this will only grow as consumers turn to their devices for everyday tasks like shopping, browsing, storing coupons and loyalty cards.
At the simplest level digital identity is a supplement to the core identity of any individual. This can range from a single attribute or credential, such as age, to the complex, address details or a bank account.
By providing an alternate way to log-in to an app or make a payment using authentication via a mobile device, much like GSMA’s Mobile Connect and Twitter’s new solution Digits, consumers are able to take back control. They can decide which information to share; providing users with security, and ease of use.
Identity is not only an issue for consumers, retailers also want to know about customers to minimise fraud and better target customers to sell more goods and services. For example, by leveraging digital identity retailers can reduce coupon and loyalty fraud. Customers could use identity with serialised digital coupons to authenticate who they are before using the coupon, ensuring the coupon is used as intended and not copied.
Finally, consumers using their mobile device while shopping, whether in-store or online have an added layer of protection delivered from their mobile operator.
Should a mobile device be lost or stolen all consumer needs to do to virtually shut down their device is to notify their service provider or mobile operator.
The operator can close down the SIM using technology enabled through their secured network. This further ensures that customer data is protected and doesn’t become privy to fraudsters looking to access valuable personal and financial information. Imagine a day when you don’t have to make 15 calls when you’ve lost your wallet …
For more information on mobile payments and security please visit: http://www.gsma.com/digitalcommerce/mobilepayment
