Payment Method 1.0
Just a year ago, I was shopping on the internet and I paid for the item through one of the many payment gateways available. I selected a particular bank, entered my debit card/credit card details, my CVV & finally authentication code to complete the payment. And yet to buy another product I had to repeat the exact same process, which was painfully long. With this frustration, I never expected or thought what factors might be changing the payment landscape forever.
Apart from going through the inconveniently long payment process, here’s what makes payment gateways even more undesirable to use: our bank accounts are linked to it. We usually stash our earnings/savings in our bank accounts and with increasing payment frauds, people become apprehensive in sharing their account/card details.
Here is an interesting comic strip which aptly describes general reaction when it comes to online payments -
With cyber crimes on the rise, people fear to share their personal information through payment gateways as this is one of the most exploited channels and if hacked, would result in huge losses.
So, then came Payment Method 2.0 which introduced ‘digital wallets’ to us.
Payment Method 2.0
The World has witnessed the changing the payment landscape LIVE. Digital wallets allow consumers to ‘store’ money in itself and perform online transactions through the money already in the wallet, eliminating the need to enter the card details etc. This has been a crucial factor in changing the payment landscape as it reduces the risk of payment fraud and ensures a smooth payment experience for the consumers.
In 2014, 22% of all mobile phone owners reported having made a mobile payment. Digital wallets such as Apple Pay, Google Wallet, and Bitcoin Wallets are gaining traction with both online and brick-and-mortar retailers.
Cyber Risks Involved In The Payment Method 2.0
As changing the payment landscape becomes more often, payment-related-crimes have also changed. Cyber criminals worldwide skilfully utilize a variety of techniques to steal information from ill-equipped users and businesses. A few examples citing these common threats are:
- Criminals use “spoofing” to steal valuable customer information by creating fake websites posing as legitimate online retailers. Once the target enters sensitive information the criminal begins completing online payments or other Card Not Present (CNP) transactions like digital wallets.
- Cyber criminals use sophisticated methods like device malware or phishing to steal consumers’ bank account information causing them devastating losses.
- Criminals exploit the lack of strong user authentication or physical card requirements. With Apple Pay, consumers don’t provide any strong personal authentication instead they verify using dynamic knowledge-based questions, which makes digital wallets a tempting target for identity thieves.
These nature of payment thefts are only the reported ones. Cyber criminals are becoming cleverer in their approach & are always on the prowl for unguarded transactions. Make sure you safeguard your digital wallet transactions by following simple security tips we wrote in one of our recent posts.
As for mobile wallet companies, they should always be on their toes in securing consumers personal data and offer safe online transactions. At Appknox, we encourage businesses to be proactive towards security and hence also offer a free security analysis of mobile apps to help businesses take immediate measure and not become victim to hacks.