As we speak, it’s difficult to find a regular consumer who doesn’t conduct their banking via digital channels—-more so with the convenience and safety of mobile banking (m-banking), which has become the preferred mode of banking given the convenience and flexibility available at your fingertips.
Payments are as near to real-time as never before because of the convenience of mobile money services and the integration of payment systems such as Same-Day ACH, Zelle and debit cards. Nevertheless, the increasing simplicity and comfort of using payment channels have made it easier for cybercriminals to (1) cheat their way into unlawful cash and (2) collect their loot much faster than before.
Because consumers are the weak point in fraud risk, controlling and mitigating risk should be the top focus for all involved in payments.
Who’s in Charge of Safeguarding Shoppers from Fraud?
A Javelin Strategy & Research study found that leading payment providers handle fraud complaints more readily than banking institutions (BI). Defrauded customers are more likely to resort to these firms rather than their banks.
It’s not so much about being able to “make the buyer whole again,” rather because the general opinion is that problems should be resolved through the business where they happened.
Any time a customer is defrauded in a digital wallet away from a banking institution’s control, the BI in question loses the chance to re-establish itself as the hub of digital banking authority.
With m-banking, BIs can finally re-enter the dialogue and demonstrate to clients that using their app is the fastest and safest method to accept payments. Thanks to seamless banking services, financial institutions power shoppers to verify payments until they feel entirely safe, even during dangerous transactions involving large sums of money.
Underperforming their Role
Furthermore, when buyers use mobile banking apps, the fraud crews in banks have more expertise and understanding in handling such frauds.
For instance, if a fraud attempt is identified on an m-banking app, the fraud response crew is well-placed to spot similar trends tied to the incident and safeguard future shoppers from being defrauded the same way.
Third-party service providers, on the other hand, do not have the same capacity and resources to detect and thwart future attempts. Furthermore, sellers like Zelle are unable to flag/report or reverse payments. The outcomes are final after they have been confirmed.
Digital payment solutions are being embraced at a breakneck pace in all sectors. Now that the regular buyer is accustomed to the simplicity and speed of digital solutions, they are unlikely to return to “conventional” ways any soon.
Content crafter Alex Wilmont has been active in the payments industry for over 15 years. He lives simply, gives generously and loves his 2 dogs. His mission is to enhance and innovate the fintech industry through Pinwheel Pay for years to come.