With the evolution of technology, all of us have become a part of global village where everything is just a click away from us. This was also the basic idea for e-commerce which provided the concept of shopping online through internet connection to save time. With further enhancements, everything shifted up from computers to mobile systems (wireless) providing even more easy approach to different applications such as online banking and online shopping etc. The initial intention with all this was to make the process easy as well as less time consuming for consumers, but this concept also invited a great deal of mobile fraud to get into existence.
As we are moving along, the mobile e-commerce or simply m-commerce is becoming more and more popular due to its ease of operation. M-commerce is more common in younger age groups which are exposed to smart phones in the early ages of their lives and feel confident about it. Commercialization of relatively cheaper smart phones over the last decade has given rise to exponential increase in mobile commerce. Each year, the percentage of online purchasing using mobile phones increase significantly and makes major part of total e-commerce sale (62% of total e-commerce sale was done through mobile in 2018). This increase in mobile sales has also gained attention of hackers and other cyber criminals and has increased the frequency of frauds as well where criminals just swooped in and stole money from customers by stealing their credit card information.
What is a mobile fraud?
Basic mobile fraud for e-commerce websites involves breaching into customer’s mobile phone to steal credit card information using different techniques including spam websites, fraudulent ads and apps etc. The hackers take the credit card information and suck up the credit card in no time.
There have also been frauds involved with e-commerce through computer but the chances of getting mobile fraud are 20% higher than that of getting a fraud on your PC. The reason is that the mobile systems are consisted of much more complex architecture than that of PCs and hence there is a lot of place available for hackers or fraudsters to hide without getting caught.
Types of mobile frauds for e-commerce
The few of the leading fraud types in e-commerce are listed below:
1. Credit Card Fraud
In this fraud, the fraudster steals the credit card information of customer and uses it to do online purchases.
2. Identity fraud
This fraud is very common type of fraud and also involves stolen credit card information. However, in this type of fraud, fraudster uses some false identity while purchasing.
3. Seller Fraud
In this type of fraud, the fraudster steals the id of the seller or merchant and take false orders from the customer in return for money.
4. Reimbursement fraud
The fraudster in this type of fraud uses stolen credit card and purchases online item and then overpays it. Later, the fraudster demands the over payment amount from merchant in the form of cash.
What is at stake?
Generally, one could consider that how big this mobile fraud could be? May be few hundreds of dollars or so? It may seem right when talking about one fraud case, but the frequency of these mobile fraud thefts is very high. One study shows that from total annual revenue of e-commerce, 1.5% of it goes to frauds, and value of fraud has reached around 15 billion dollars by 2018. The most loss in the mobile fraud lies on the side of merchant where he has to pay to pays some additional fees and costs for replacement as well. In one study of 2015, the numbers came out to be that for each dollar wasted in fraud, merchant pays 2.40 dollars.
So, looking at the numbers, this mobile fraud in e-commerce appears to be a huge issue specially when mobile commerce is growing day by day which further increases the chances for increasing mobile frauds as well.
How to prevent mobile frauds in e-commerce?
The risk of mobile frauds can be limited using different technique. Few common practices are:
1. Multi factor Authentication
By adding multi factor authentication, the risk of mobile frauds can be reduced. Different factors can be used for this purpose e.g. fingerprints, security questions and voice recognition etc. Each extra layer in authentication process further decreases the chances of getting robbed by adding extra security.
2. Reducing credit card limit
Reducing credit card limit, however, does not prevents you from getting robbed, but assists in a way that if such thing happens then the damage should be minimal. These limits can also be set monthly, weekly or daily. One should set the credit card limit similar to the approximate daily/weekly/monthly usage of the credit card to reduce risks.
3. Mobile number identification
To increase the security, mobile phone identification can be set up on your credit card. In this case, before each transaction a code is received on your mobile phone to further proceed with the transaction. This additional identification reduces the risks of being stolen to a very low value.
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