In a new white paper, digital transaction security specialists CyberloQ argue current paradigms for securing mobile transactions don’t work. Failsafe authentication, including laser-focused geolocation technologies, are a must if we’re to halt and reverse current growth patterns in fraud.

M-commerce: great growth, greater fraud

The growth of mobile banking and payments has been an economic and social phenomenon in the last decade. Data from Grandview Research shows growth of almost 27% between 2020 and 2021^[1], to reach $9.1 billion in the US – that’s more than 10% of all e-commerce sales.

According to Oberlo Technologies, online shoppers used mobile devices for the majority (72%) of purchases – there’s no question that mobile is now the world’s preferred way to pay.

In the white paper, we recognise that such rapid growth is good news for everyone.

However, research from SEON^[2] shows that fraud on mobile devices was responsible for 50% of all successful e-commerce fraud attacks last year. Meanwhile, the cost of dealing with chargebacks keeps rising.

Vesta Technologies^[3] estimates that chargebacks cost merchants and intermediaries $130 billion globally in 2021 – more than three percent of total mobile sales volume. Clearly, these levels of fraud – and the costs associated with it – are unsustainable.

These massive increases in fraud attacks and associated losses come despite the introduction of a wide range of anti-fraud protocols (such as EMV 3DS2), and sophisticated fraud detection algorithms that use Artificial Intelligence (AI) and Machine Learning techniques.

The core challenge in combating mobile fraud is the need to establish a strong connection between a device, its user and the credentials being used to complete mobile transactions.

In Locking Down Mobile Transaction Security, we show how criminals have exploited this loophole via account takeover (ATO) and synthetic ID fraud scams. By far the largest growth area for account takeover is in mobile commerce: Sift Technologies estimate this form of fraud rose by more than 300% between 2019 and 2021^[4].

Triple-locked mobile security

The mobile commerce market urgently needs a security solution that accurately and rapidly identifies the fraudulent use of a mobile device, while at the same time confirming the identity of bona fide users to make their transactions faster and smoother.

As well as enabling genuine users to transact with less friction via strong on-device authentication, we need a solution that identifies and prevents fraudulent transactions before they complete, rather than belatedly identifying “successful” fraud events. In other words, a solution that stops – rather than merely discovers – fraud.

CyberloQ has created a Multi-Factor Authentication (MFA) solution featuring a unique CyberloQ User ID.

By cross-referencing this ID with a mobile device’s unique hardware identification number – such as an iPhone’s Unique Device Identifier or UDID – users can be authorized rapidly and effectively.

Most importantly, usage can be restricted to clearly defined geographic boundaries and the CyberloQ application will only function within these boundaries.

Securing mobile commerce may be the biggest challenge facing the payments industry today.

Current solutions have failed to make the connection between the physical location of a device user and the credentials being used to authorise transactions.

CyberloQ’s innovative solution solves this weakness through its combination of device identification, geo-location validation and multi-factor authentication to deliver on mobile commerce’s promise of faster, safer and more secure transactions in any environment.

Download a free copy of “Locking Down Mobile Transaction Security”, now.

[1] See Grandview Research, 2022, “Mobile Payments Industry Analysis”

[2] See Card Not Present.com, 21 July, 2022, “Mobile Devices Driving Fraud Growth”

[3] See Vesta.io – “How to reduce chargeback expenses”

[4] See Helpnetsecurity.com, October 6, 2021: “ATO attacks increased 307% between 2019 and 2021”