How to Solve Mobile Payment Security Concerns
Mobile payments are on the rise. A recent report from market research firm TrendForce projects that global mobile payments will reach $780 billion by the end of 2017, up 25.8 percent from 2016. Businesses stand to gain substantially by adopting mobile payments, however, many are hesitant to do so due to security issues.
While concerns about fraud and chargebacks are valid, not accepting mobile payments can end up harming your business more than helping it. Consumer buying habits are changing. People have become accustomed to convenient and comfortable payment processes. In addition, the largest consumer demographic is comprised of tech-savvy millennials, who are confident in making purchases via mobile devices — and they expect to be able to do so.
Therefore, not accepting mobile payments puts businesses at risk of becoming obsolete in the coming years, and the benefits of mobile payment acceptance far outweigh the concerns.
Merchants Stand to Benefit From Mobile Payment Acceptance
With the growing adoption of mobile payments by consumers, and the forecast for widespread acceptance going forward, merchants should consider implementing mobile payments and taking advantage of the many benefits they offer. The advantages of mobile point-of-sale implementation and mobile wallet acceptance include:
- Improved customer experience: Mobile payments are simple, convenient and fast, which makes the payment process more enjoyable for customers. Plus, giving consumers the option of using their preferred payment method further adds to a positive purchase experience.
- Increased sales: Businesses that accept mobile payments increase their potential customer base and generate higher revenues. The positive customer experience (discussed above) will generate repeat customers and increase referrals, ultimately driving sales. Furthermore, personnel armed with mPOS devices can increase sales by assisting customers and completing payments at various locations, decreasing the time in which consumers can reconsider their purchases.
- Decreased costs: mPOS devices are significantly less expensive than traditional POS terminals, and therefore a worthwhile investment. Mobile wallets offer lower transaction fees than traditional credit or debit payments, further decreasing merchant costs. Also, businesses that accept mobile payments don't need to print paper receipts, as these can be sent directly to the customer electronically, further lowering costs and improving profitability.
Despite the obvious move towards mobile and contactless payments, many merchants are reluctant to jump on the mobile payment bandwagon because of security concerns.
Key Security Concerns
The security concerns that are causing business owners to hesitate when it comes to embracing mobile payment methods include the following:
- App clones: Virus-infected app clones can be downloaded by mistake in place of authentic payment apps.
- Authentication vulnerabilities: Older phones are vulnerable to identification fraud and are easily hacked.
- Mobile fraudsters: Proxy IP or burner phones can be used for mobile fraud.
Despite these security challenges, merchants shouldn't be dissuaded from adopting mobile payments, as technological solutions and better understanding of how to use mobile payments can overcome them.
Tips to Combat Potential Mobile Payment Risks
Implementation of best practices can solve many of the potential risks commonly associated with mobile payments. The following three key best practices should be implemented together with mobile payment system adoption:
1. Educate your customers.
Make it a point to keep your customers abreast of the dangers of app clones. Educate them on the importance of downloading apps only from App stores, as well as the importance of timely app updates to ensure the highest level of payment security. Provide additional tips to your customers on good user habits, such as screen locks, updated account verification and security settings.
2. Implement authentication verification.
Newer devices enable biometric authentication such as user fingerprint identification. When older devices are used, alternative identification methods can be employed, such as two-factor authentication or virtual tokens.
3. Use a PCI DSS level 1-certified mobile payment platform.
PCI DSS level 1-certified payment service providers ensure the highest level of security. These providers have blacklists and historical data to identify fraudsters and trends. They use advanced algorithms, geolocation and IP tracking, which detect potential security breaches and fraudulent transactions while enabling valid transactions to go through.
Take Advantage of the Changing Payment Landscape
Consumers are increasingly embracing mobile payments for both online and offline purchases. They're feeling more and more comfortable (and even prefer) using mobile payments to complete purchases for everything from groceries to clothes to booking hotels. Thus, merchants must adopt mobile payments in order to cater to their evolving target audiences.
The implementation of best practices can provide the necessary security to safely adopt mobile payments and experience strong business growth. Merchants that do so will enjoy not only security, but a host of additional benefits, such as customer satisfaction, increased sales and decreased costs, which all together can improve their bottom line.