Fraud and Consumer Confidence in Emerging Payment Technologies

When submitting payment, consumers are concerned about security. The Target security breach in December 2013 sparked widespread consumer skepticism concerning stored credit card data. The breach led to doubt with regard to information integrity at retailers. It also led to fear about fraudulent attempts to steal personal data. Today’s consumer is unsure about security in a world with many emerging payment options including mobile technologies.

The daily news is flush with data breaches and attempts to gather personal information from individuals. Both organizations and consumers are on high alert for signs of deceptive and fraudulent behavior.

Phone scams, otherwise known as vishing, are common knowledge but can still pose serious risk to potential victims. More and more intimate details are being brought into fraud attempts.  As these attempts grow more complex and specific, consumers are more likely to make rash decisions leading to increased risk.

According to BBC News, in a January article, phishing scams today have five techniques to confuse consumers. First is information. Now, more than ever, information is at the disposal of fraudsters. A caller may have your address, bank details, full name. Second is urgency, consumers are deceived into thinking they stand to lose something if they do not act. Third is phone spoofing, obscuring the caller’s number to appear legitimate. Fourth is holding the line. If after receiving a fraudulent call posing as your bank you attempt to call your bank directly, you are redirected to the original caller. Fifth and last is atmosphere, making it appear the caller is in a call center and adding to the illusion of legitimacy.

Another scam is phishing, using email to target individuals. The email poses to be from a bank, merchant or even a friend. It attempts to get consumers to click on a link or call a provided phone number in order to complete some action.

For consumers trying to recognize vishing and phishing scams there are a few tips and techniques.

  1. Never give any personal information over the phone.
  2. If you receive a suspect call from your bank, use a different phone to call the bank using a number listed on their website.
  3. Check the URL of links in emails to ensure they are authentic.
  4. If in doubt concerning the contents of an email, do not use the links in the email. Instead use your web browser to check your account directly.

As consumers explore new payment technologies, security continues to be a concern. It is no surprise the leading reason folks are not adopting mobile payments is concern over security. Half of North American consumers cite security concerns for not shopping online or through mobile. Nearly half (49%) of responders also report discomfort posting payment information to any one of these platforms.

Security will continue to affect how consumers are adopting new technologies. This is driven by high profile data breaches and changing ways fraudsters target consumers. As mobile payment technology continues to grow, the skeptical consumer will need to be convinced of the security mobile payments offer.