By Ravi Battula
The ubiquity of mobile payments allows individuals to make purchases or transfer funds using their smartphone. Mobile payments have redefined convenience in recent years, empowering consumers. With just a few clicks on a smartphone, people can easily make purchases, whether it’s grocery shopping, booking travel tickets or ordering food. Gone are the days when carrying bulky wallets or fumbling for change were common scenarios. Mobile payments offer a seamless experience that saves time and simplifies transactions, with additional offers and loyalty bonuses you can’t miss.
Whether through email, SMS, bank account login, digital payments or social media, cybercrime is extending its reach into every aspect of our daily lives. All of a sudden, you get an SMS alert that your account has been debited with a certain amount of money that you haven’t spent. This alert is enough to send a shiver down your spine. Well, the monster behind this disaster is a cybercriminal who misuses your personal and financial data to steal your life savings.
The skyrocketing popularity of mobile payments and the increase in cybercrime make it essential for service providers to develop robust security measures. Strong authentication is essential to protect sensitive financial data in mobile payments.
What is Authentication
It’s basically about uniquely establishing who you are (mobile number) and what you know (PIN code, biometrics, etc.). These are table stakes for any financial transaction; therefore, any app we use on our mobile should incorporate these features for added security and protection to protect not only the consumer but also the merchants from liability and chargebacks that the customer may pass on to the merchants. It is imperative that as merchants and PSPs (payment service providers) adopt these technologies, the wider ecosystem of issuing banks, acquirers and intermediaries are also ready to support biometric authentication methods. stronger beyond the regular OTP, which is plagued with multiple issues like scaling, non-delivery sometimes, sim cloning, coverage in remote locations, etc.
Issuing banks have the ability to enhance their authentication systems beyond biometrics to provide a differentiated experience for different customer segments who have the choice to opt for biometrics at certain merchants or across all areas. In addition to customer convenience and increased security, banks can also save on SMS and associated operational overhead.
Likewise, acquiring banks can unlock the potential of biometric security for their merchants. Due to the proliferation of smartphones, this is no longer a novelty but offers customers the flexibility to choose their authentication mechanism for payments and financial transactions.
Protection of financial data
Mobile payments involve the transmission of valuable financial information, such as card details, bank account numbers and personal identification. By implementing strong authentication mechanisms, companies can protect customer data from unauthorized access and reduce the risk of financial fraud. Strong authentication methods, such as biometrics (e.g. fingerprint, face recognition, voice recognition, retina, etc.) and two-factor authentication are strong theft deterrents identity and unauthorized transactions.
Improve customer confidence
In an age of privacy breaches and data leaks, customers place great importance on the security of their financial transactions. By prioritizing strong authentication, companies demonstrate their commitment to protecting customers, thereby earning their trust.
Comply with regulatory standards
The mobile payment industry is subject to various regulatory frameworks designed to protect user data and ensure transaction security. Strong authentication measures often serve as a requirement for compliance with these standards. By adhering to industry regulations and proactively implementing strong authentication methods, organizations demonstrate accountability and reduce the legal risks associated with non-compliance. Various countries offer varying levels of biometric authentication, for example, in the Middle East, biometric authentication is very common due to higher adoption of smartphones, infrastructure, etc. While India, being the largest digital payments market in the world, has still not opened up biometric authentication, which is ripe for adoption and the next wave of disruption.
Minimize the risk of fraud
Mobile payment platforms are prime targets for cybercriminals looking to exploit system vulnerabilities. Weak authentication methods can provide unauthorized access, fraudulent transactions, and malicious activity. Strong authentication measures provide an additional layer of defense, greatly reducing the risk of such attacks.
Strong authentication goes hand in hand with technological advances in the mobile payment sector. Organizations that invest in advanced authentication solutions are positioning themselves as forward-thinking industry leaders. By adopting innovative authentication methods such as biometrics, adaptive authentication and tokenization, enterprises can stay ahead of the competition, adapt to changing security challenges, deliver a transparent and secure payment and protect against chargebacks and liabilities.
Strong authentication essential for mobile payments
In the mobile payments landscape, strong authentication is not just an option but a need of the hour. As the digital landscape evolves, organizations need to understand the central role of strong authentication mechanisms in securing mobile payments. By doing so, businesses can demonstrate their commitment to their customers while fostering a secure and convenient payment ecosystem.
The author is the Vice President of Merchant Acquiring Business, Wibmo – a PayU company.
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