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STAMFORD, Conn., March 4, 2015

Mobile Payment Fraud Is a Growing Problem


As mobile payment solutions continue to become more widely used, mobile payment fraud is a growing concern. Avivah Litan, vice president and distinguished analyst at Gartner, said on her Gartner blog, fraud in the mobile channel presents looming problems with mobile payments.

Highlights from Ms. Litan’s blog are included below:

For years, we have been briefed by vendors offering a plethora of innovative and strong user authentication solutions for mobile payments and commerce. And for years, we have been asking the vendors touting them how they know their mobile app is being provisioned to a legitimate user rather than a fraudster. That always appeared to be the weakest link in mobile commerce –making sure the app is provided to the right person instead of a crook.

Identity proofing in a non-face-to-face environment is anything but easy, but there are some decent solutions around that can be stitched together to significantly narrow down the population of fraudulent transactions and identities. The key is reducing reliance on static data – much of which is PII data that has been compromised by the crooks – and increasing reliance on dynamic data, like reputation, behavior and relationships between non-PII data elements.

This problem is only going to get worse as more mobile payments solutions are released. The vendors in the mobile user authentication space have consistently answered that they are leaving account provisioning policies to the banks or other consumer service providers provisioning the apps. It’s time for them to reconsider and start helping their client banks and service providers by supporting identity proofing solutions built into their apps. Whoever does this well is surely going to win lots of customer support… and revenue.

Ms. Litan’s full blog post, “ApplePay Fraud Points to Looming Problems with Mobile Payments”, can be read at http://blogs.gartner.com/avivah-litan/2015/03/02/applepay-fraud-points-to-looming-problems-with-mobile-payments/.

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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