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Jakarta Post

Protecting your mobile wallet: Defending against payment fraud

As consumers continue to embrace this modern form of payment, it is essential to understand the potential risks and take necessary precautions to safeguard our financial transactions.

Djoni Tany (The Jakarta Post)
Jakarta
Mon, February 3, 2025

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Protecting your mobile wallet: Defending against payment fraud Scan to pay: A barista (center) prepares a beverage on Sept. 19, 2024, as a customer uses a smartphone to scan a Quick Response Indonesia Standard (QRIS) code to make a digital payment at SK Coffee Lab, a café in Kediri, East Java. Bank Indonesia reported that QRIS transactions grew 217.33 percent over the past year to reach 52.55 million users and 33.77 million merchants. (Antara/Prasetia Fauzani)

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n this digital-first age, mobile wallets have become a convenient payment method to make payments, offering ease, speed and security to consumers globally. According to research by Payments, Cards and Mobile, due to their versatile features, by 2027, digital wallets are projected to account for more than US$25 trillion in global transaction value or 49 percent of all sales online and at points of sales combined. Even though digital wallets were adopted in the late 1990s, the pandemic gave them a strong lead.

However, with the rise of mobile payment adoption come the fraudsters who are now well-versed with customer preferences and payment fraud and the targeting of mobile wallets has substantially increased. There are multiple scenarios where consumers get trapped in mobile wallet fraud as fraudsters scam using situations such as “accidental transfers”, or pretending to be calling from a business, government agency, bank or utility company.

As consumers continue to embrace this modern form of payment, it is essential to understand the potential risks and take necessary precautions to safeguard our financial transactions.

Fraudsters often like to use basic, yet most effective phishing techniques, which include sending deceptive emails, text messages or making phone calls to trick users into revealing their sensitive information. An example is an email sent to users of an online service that alerts them of a policy violation requiring immediate action on their part, such as a required password change or an instant payment.

This form has picked up momentum in the past few years, especially in countries like the United Aarab Emirates, where scammers pretend to call from central banks, police stations and other authorities to get instant reactions, resulting in heavy losses. This method, among many, is so far the most common form of payment fraud to be recorded in multiple countries.

Banks and financial institutions must ask customers to always be cautious and verify the authenticity of any communication before sharing personal or financial details.

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In 2024, malicious mobile app scams continued to pose a significant threat to users worldwide. According to Kaspersky's Q1 2024 report, it is indicated that over 10.1 million attacks involving malware, adware or unwanted mobile software were blocked. These malicious apps exploit trusted platforms like the Google Play Store, exploiting the trust of millions of users worldwide.

Once the app is downloaded, fraudsters silently execute their agendas, subscribing users to unwanted services and levying unauthorized charges on their mobile accounts. As financial institutions, banks must alert their customers, requesting that they stick to official app stores and reputable developers to reduce the risk of downloading malicious apps that can compromise their mobile wallet's security, as there is a great threat to their personal information used on these platforms.

Financial institutions need to constantly emphasize the importance of having strong authentication mechanisms in their digital wallets, such as biometric authentication or strong passwords. One of the most important steps toward achieving this objective is that banks should be urged to educate their users on the importance of not using easily guessable passwords and enabling two-factor authentication, which gives customers an added layer of security.

Consumers must act with caution if unforeseen circumstances of mobile theft occur and promptly report any loss or theft. Furthermore, using device locking mechanisms such as PINs, passwords or biometric locks to prevent unauthorized access to mobile wallets can greatly secure against any further damages.

In 2023, Forbes conducted a survey where it was revealed that 40 percent of respondents had their information compromised while using public Wi-Fi, and 20 percent have used public Wi-Fi to make financial transactions in their day-to-day activities.

This means logging in to online bank accounts or wallets or moving any transaction puts a lot of personal information at risk, potentially right into the hands of fraudsters.

Banks should urge their users to avoid conducting financial transactions or accessing mobile wallets on public Wi-Fi networks as they can be susceptible to eavesdropping and man-in-the-middle attacks, as well as using secure and encrypted networks or considering using a virtual private network (VPN) for added security.

Mobile wallet users should also keep their mobile operating system, apps and mobile wallet apps up to date with the latest security patches and updates. Users can also regularly scan their devices for malware using reputable security software to ensure a secure environment for their mobile wallet.

This practice should be talked about very widely as this can be done by anyone without any additional effort. Financial institutions and wallet providers must promote the ideas of regularly reviewing mobile wallet transactions and setting up alerts for any unusual activities. This allows users to report any unauthorized transactions immediately to the mobile wallet provider, as well as the bank or financial institution. One example of fraud is a first-time user paying for an unusually large order through their digital wallet, a common behavior of someone using a stolen credit card.

Every user needs to stay informed about the latest fraud trends and evolving techniques being used by fraudsters; not only those related to digital wallets, but with payments in general. It is important to know how to be cautious of unexpected requests for personal or financial information and educate yourself on how to identify and avoid scams.

Even though mobile wallets offer convenience and efficiency, they remain a prime target for cybercriminals. Wallet providers need to collaborate to understand the power of AI for fraud prevention. Such technology has reached new heights and tech-providers like ourselves are using historical global expertise, equipping consumers with the ability to predict and prevent fraud attempts earlier in the payment process.

Consumers should protect their mobile wallet like they would protect their physical wallet and remember that staying informed and adopting strong security measures are key to safeguarding their financial transactions in the digital realm.

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The writer is sales director of Indonesia at BPC, a payment solutions provider. The views expressed are personal.

 

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