Accept mobile payments without putting your business at risk.
While mobile payments are still far from becoming mainstream, a lot of people are warming up to the idea of paying for their purchases using digital wallet products from trusted companies such as Apple, Google and Paypal. In fact, the volume of proximity payment transactions in the US doubled between 2012 and 2013. This upward trend is expected to continue for the next few years and may reach $142 billion in 2019.
Unfortunately, this trend is also attracting the attention of cybercriminals. According to a study conducted by LexisNexis Risk Solutions, a US-based company that offers risk management, fraud prevention, background checks, public records, and identity management solutions, mobile payments constitute 14% of transactions among merchants accepting such payments. However, they also make up 21% of fraud cases. This is very alarming since for every $1 lost to fraud, the affected merchant ends up losing $3.34.
Tips to Prevent Mobile Payment Fraud
Thankfully, there are a lot of ways by which you can reduce the risk of mobile payment fraud. Here are some tips that will allow you to accept mobile payments without making your business vulnerable to fraudster attacks:
Understand the changing customer behavior. While most e-commerce transactions are placed during core business hours, the use of tablets and smartphones changed all of this. Now, the peak buying time for those using such devices is between 8 PM and 9 PM. In addition, most of today’s consumers also use multiple devices at home and usually switch between these devices when making a purchase. Take all of these things into consideration to better understand your customers’ shopping behavior and to make sure that the fraud rules you will put into place will not affect your botttomline.
Evaluate the reliability of your data. It can be difficult to confirm your customer’s location when he or she is using a mobile device. While IP geolocation has been useful in tracking customers’ locations at the time of purchase in the past, this can now be difficult to accomplish especially if the mobile device is not connected to a WiFi network. In such cases, you should try to collect your customer’s GPS data to further strengthen your anti-fraud screening capabilities.
Capture additional data. Mobile devices do not provide a reliable device fingerprint so you should capture the International Mobile Equipment Identity or IMEI (a unique, 15-decimal digit number used to identify the device) and the universally unique identifier or UUID numbers (a unique 128-bit number used to identify information) of the mobile device used in making a purchase. Use this information and compare it against addresses or credit card numbers to check the validity of the transaction.