There has been a history of doubt over the security credentials of mobile payment solutions. Consumers have generally seen traditional methods such as physical credit cards as ensuring greater safety from fraud, and have been sceptical that mobile payment can offer the same level of protection. At the extreme end of caution, these fears have seen some parts of India favouring cash in up to 90% of online purchases. Western consumers have taken more readily to the technology, but have remained relatively wary.
This may be on the verge of change, however. A new white paper from respected cybersecurity consultancy ISACA argues that mobile payment may, in some crucial respects, now surpass the security potential of alternatives. Chief among their findings are that two developments in identity verification promise the enhanced security necessary to open a new chapter for mobile payment: tokenisation and two-factor authentication (2FA).
Tokenisation allows purchasers to eliminate exposure of their primary account number during transactions, by generating unique identification symbols which cannot be reused outside specific parameters. The ‘token’ is composed of information containing partial identification of the account, and information relating to the particular transaction, rendering it useless to any intercepting fraudster. 2FA requires not only a username and password, but some form of additional verification information – for instance a code generated by a specific device. 2FA is not itself new, but is rapidly becoming a standard requirement; indeed, the forthcoming European Payment Services Directive (PSD2) will make strong 2FA regulations standard across EU member states, in pursuit of the European Digital Single Market.
The emergence of new answers to the old concerns about security comes at a key moment for potential consumer adoption: new market research by Ovum projects an exponential rise in users of mobile payments on the horizon, from 44.55 million in 2014 to 1.09 billion in 2019. This represents a total market value of $142 billion in 2019, nearly triple what it is now. This accelerated uptake is predicted despite, only last year, ISACA concluding that a mere 23 percent of cybersecurity experts had confidence in mobile payments.
With consumers testing the water in ever-greater numbers, despite their own reservations – and opinion-leaders newly assured of the security situation ahead – this is an auspicious time for Mobile Connect. PSD2 will soon require of mobile payments a feature which Mobile Connect was designed to provide, and which it provides in the most convenient manner possible, by acting through a device billions of people keep on their person as a matter of course. In addition, a market which grows rapidly in the face of security fears can only become more buoyant with added assurances from the most trusted voices in the industry. We very much look forward to seeing the shape it takes next.