Mobile payment issues like fraud are on the rise. Occurrences of fraud using mobile devices increased from 47% in 2022 to 61% in 2023. Businesses ought to address mobile payment fraud so they don’t suffer financial and reputational damage.
Trustpair is the ultimate way to prevent and detect payment fraud, thanks to automated account validation. Request a demo to learn more!
Mobile payment fraud: what is it and how does it work?
Mobile payment fraud refers to fraudulent transactions or scams involving a mobile phone. To make a mobile payment, usually, you would tap your phone on a card machine and wait for the transfer to go through.
Alternatively, you could send money to another organization via peer-to-peer (P2P) payment apps such as Cash App, Venmo, Zelle, and PayPal.
The ways that mobile payment fraud could occur include:
- Digital wallet fraud, through the likes of Apple Pay or Google Pay – mobile wallet fraud impacted 7% of U.S. organizations in 2022, rising from 4% in 2021. Fraudsters could access a victim’s mobile with their business card in their digital wallet and make a transaction or a contactless payment
- Phishing – a fraudster could send a Whatsapp or a text messagel impersonating a colleague or a vendor asking for their invoice or wage to be paid early to a new bank account using mobile payments
- Account takeover – a fraudster may steal personal details, such as your banking details to set up your business mobile wallet on their phone and make purchases on your behalf
- Expense fraud – on a business trip, you could use your mobile wallet to pay for a friend’s lunch and claim back a reimbursement, but you are not allowed to for non-colleagues
The red flags of mobile payment fraud
Unusual request of mobile payments to your business
If your company gets an email or message to ask if a vendor could be paid via a mobile transaction to a separate account when they are usually paid in a different method, this should raise alarm bells.
Encourage your finance team to challenge the vendor, ask why, and ring your point of contact for the supplier to work out whether it is a legitimate claim.
Urgent or desperate situation described
A scammer may use social engineering tactics when emailing you and impersonating a colleague.
They would do so to put pressure on you when describing an urgent situation that needs your intervention.
For example, a fraudster could either hack into a colleague’s email via malware or impersonate the colleague with a phishing email. From there, they may ask the finance team to pay their month’s wage early via mobile payment due to a family emergency that requires a lump transfer to a hospital for care.
If you are ever in a situation like this, double-check your colleague’s contact details and call them to discuss the situation and check that it is legitimate.
Bogus contact
If you receive an email from someone impersonating a colleague with a fake email address, it is likely to be a fraud attempt.
For example, the scammer could be using a distinctly similar email to your work one (jack@trostpair.com instead of @trustpair.com). This is designed to gain your trust and the scammer hopes that you don’t notice before entertaining their request.
Spelling and or grammar mistakes
In a mobile fraud attempt, if someone is impersonating a colleague or a vendor and their text message contains unusual spelling or grammar mistakes, this should spark alarm bells and the case should be inspected.
Unusual interest in your personal information
If a vendor is placing unusual interest in your personal information by asking for details such as your social security number, you should take a step back from the text message or Whatsapp chain and assess if this is a legitimate vendor or a scammer.
For example, a vendor doesn’t need your social security number so it is likely that this is a fraudster who is looking to commit identity theft.
Additionally, if a vendor asks for your account details and then you receive a push notification, it is likely that it is not a coincidence and it should raise suspicions. Don’t blindly accept the push notification. Learn more about authorized push payment fraud here!
How can you prevent mobile payment fraud in your business
Take a look at exploring these mobile payment fraud prevention tips if you aren’t already in your organization…
Training
Employees should be trained and educated so they know what payment fraud is. They also should be educated by their employers on mobile payment fraud risks and how to stop mobile payment services fraud.
They should be educated about the red flags to create awareness and also on the steps that they should take if they are caught out by mobile phone payment fraud to rectify the situation.
For example, when exploring how long it takes a scammer to ask for money, employees should be aware this could be right away or they could try and build a relationship first.
Trustpair data reveals that 42% of companies say better training and education surrounding payment fraud risks and cybersecurity risks are the most valuable strategies to combat fraud.
Explore extra security layers
When using digital wallets for your business card, it is worth exploring extra security layers. This could involve two-factor authentication (2FA) so the buyer has to provide another form of authentication to authorize the transaction.
Alternatively, if you have a card through Visa, the Strong Customer Authentication (SCA) may require you to enter your pin more often for contactless purchases. This means that if the card was stolen by a fraudster, eventually they would have to enter the pin and wouldn’t be able to make more fraudulent purchases.
Integrate with a fraud prevention platform
It is important that companies are protected by the necessary software. Our latest study found that two in three (66%) businesses would stop dealing with an organization if it became a victim of payment fraud and lost its payment.
One of the fraud prevention software that can protect you is Trustpair. The software completely blocks payment fraud due to automated account validation and data monitoring in real-time to highlight any suspicious activity.
Recap
Mobile payment fraud can happen to any business. It is important to be aware of the red flags and upon seeing them, investigate them further. To put a stop to it, educate, and train staff and explore a fraud prevention platform like Trustpair. The platform is the ultimate way to stop and detect payment fraud, thanks to automated account validation
