Mobile phones have increasingly become tools that consumers use for banking, payments, budgeting, and shopping. Given the rapid pace of developments in the area of mobile finance, the Federal Reserve Board began conducting annual surveys of consumers’ use of mobile financial services in 2011. This 78-page report, “Consumers and Mobile Financial Services” (March, 2015) examines trends in the adoption and use of mobile banking, payments, and shopping behavior and how the emergence of mobile financial services affects consumers’ interaction with financial institutions.
Fraud “Waiting to Happen” with Mobile Payments, Says Report
As the use of mobile payments grows globally, so too does the risk of mobile payments fraud. Gartner, and other eminent research companies, predict that these services will be extremely attractive to fraudsters and those seeking vehicles for money laundering. According to Gartner, mobile payment services are expected to reach US$245 billion in value worldwide by 2014.
According to Neural Technologies, an appreciation of the fraud and risk threats posed by mobile payments can be achieved through understanding the various mobile payment products and services on offer, as well as the different technologies used to deliver them.
Mobile payments products and services include:
- Mobile Payments: such as paying for retail goods and services, internet shopping, low value items and business expenses
- Mobile Money Transfers: transferring money from one mobile phone to another and from mobile phones to banks
- Mobile Banking Services: such as bill payments and paying of salaries
The main technologies used to deliver mobile payments are:
- Mobile Over the Air Payments: employing technology such as WAP (Wireless Application Protocol), SMS text messaging, IVR (Interactive Voice Response) and USSD (Unstructured Supplementary Service Data)
- Contactless Mobile Payments: often referred to as mobile proximity payments, such as NFC (Near Field Communications)
Neural Technologies has undertaken a comprehensive study of these technologies and services, producing an 11 page report with suggestions and recommendations on how to reduce fraud in mobile payment environments. The report is offered free of charge (and without obligation) to telecoms operators.
Commercial Director for Neural Technologies, Luke Taylor, said: “We have learnt a lot about managing fraud and risk in mobile payments from our work with one of the leading African telecoms operators. We have expanded this knowledge to include all the various services and technologies associated with mobile payments and are happy to share what we have learnt with other telecoms operators looking to roll out mobile payments.”
More information: Mobile Payments Overview: Fraud Management.