Recently I saw this article suggesting that 97% of mobile transactions in Asia are fraudulent? Can this really be true? I decided to investigate.
The article highlights an excellent report published by Secure-D looking into mobile ad fraud, which it appears is a largely hidden multi-billion dollar enterprise, impacting emerging markets in particular. As you might expect with an enterprise of this size it is multi-faceted and complex. Two of the ways fraudsters are making money are as follows:
- Fake clicks: The internet runs on advertising revenues obtained when a user clicks on an ad in a mobile app or on a web page. Fraudsters have numerous ways to create fake clicks, that look like they’ve come from a real person, and then be paid the associate fee. One way that they do this is by deploying malicious apps to the devices of unsuspecting users often disguised as a legitimate app offering an innocuous service like providing weather information.
- Hidden purchases: Many mobile users in emerging markets are unbanked and use their prepaid mobile airtime to purchase goods or services. Those malicious apps deployed to devices can also then siphon off funds from users without them realising it is happening. They just see their airtime running out more quickly than it otherwise might.
The Use of Contact-free is Accelerating
At Consult Hyperion, we have already seen the pandemic accelerate the adoption of contact-free payments in the face to face environment as customers have become wary of catching COVID by touching shared devices, such as self-service terminals and PIN pads. The use of personal devices for payments is hardly new but the attraction of an in-app/in-store version of mobile payments, whereby the consumer uses an app on their own device to interact with the retailer or service provider and pay for services, has just increased dramatically. Solutions for parking (RingGo) and for restaurants (like the Wahaca app, powered by Judopay) were already demonstrating the benefits of such an approach for customers and businesses before COVID struck.
This post was written in collaboration with Neal Michie, Director, Product Management, Verimatrix.
Banks are facing massive disruption and change from many directions. The rise of app-only banks has made the need for traditional banks to have compelling app services an imperative. Banks have of course been building mobile apps for several years. If not already, they will soon be the most important channel for engaging with and serving customers. However, mobile banking apps will also become the primary focus of hackers, intent on getting access to other people’s information and money.