Factors making mobile commerce prone to scams and fraud

Nicky James


Mobile commerce has been on the rise for the last several years and just in 2021, it is expected to grow by 14%. This is one of the fastest sectors as there is tremendous growth potential in it. Businesses around the world have turned to m-commerce as some of them have switched to this. Brick and mortar stores are now not getting the kind of reception but still, they have a sizable target audience.

One of the most common challenges faced by businesses and their users is about making the process safe. But just like computer viruses made life miserable for people in the early years of the Internet, cyberattacks, hacking, and mobile fraud are doing the same. And the level has substantially increased as the damage done by the factors mentioned above.

For businesses, it can be very severe but for individuals too this can be very harmful. There are several ways in which even a common man can be subject to many difficulties and not just using m-commerce but just connecting to the Internet can have dire consequences. The role of an app development company is crucial as the need for a great app is there all the time. It is just a matter of availability and familiarity so that users know about it.

Please go through this process following four factors that I have described will make you think about taking precautions while you use your smartphone or any handheld device for m-commerce.

1. Account Takeovers

Most of my readers would think that account takeovers happen only with big Fortune 500 companies as hackers can mint millions of dollars as a result. But everyone can be subject to such an activity and can be robbed of their precious money as they use their smartphone for banking and shopping, for example. 89% of digital fraud losses are related to accounting takeovers. This is a matter of a person gaining access to a customer's account and another reason why is important to store documents and data securely in safe cloud storage. Customer care sample email account for a bank account and in either way the losses can be substantial, related to online activities of a person.

Data breaches revealing customers' credentials are the cause of weak authentication systems of banks and Financial Institutions. Another reason can be the theft of such devices where your credentials are saved. Fraudsters used fake websites emails and SMS to con their target. Read the next section to know more about SMS fraud and why it can also be a nuisance for many people.

2. Premium SMS Fraud

Getting information through SMS was one of the most popular ways a few years ago. Menu for SMS is available through the mobile carriers so that people can easily get the information by just sending an SMS. Some of those messages were premium SMS were also a feature and became a scam rather than a helpful feature for the people.

Premium SMS messages that content providers charge for control send to consumers. But the fraudsters use this SMS to sign up users without their consent and they get charged anyway. In some cases, the cost was around 10 dollars which is very high. And then imagine this SMS in bulk quantity. A person can be robbed of hundreds of dollars within no time as hundreds of thousands of such cases surface each year.

Nowadays we do not see such messages because we don't use SMS that much, but it is still a threat. And people who are not familiar with smartphones or senior citizens can still be conned. That is why everyone needs to be aware of this and do not reply to anonymous messages as a sample reply can be fatal.

3. Phishing

It is the most common type for most businesses as many companies and individuals get emails and messages that can be termed phishing. One of the most common emails is about a company offering financial profits to the receiver or a percentage of doing his will and share of profit in his business. All they want is a letter fee and many people get conned. After all, everyone would like to get one million dollars by paying just five hundred dollars as a fee or token amount.

The sad part is still many people falling prey to this trick and such fraudsters are minting money from innocent people. I hope that after going through this blog, most of my readers would be aware of how to treat such emails and messages on smartphones in the future. Businesses need to hire app developer to come with an app that can take care of phishing or at least inform about it.

4. Friendly Fraud

By now, most of my readers might be thinking about how these fraudsters get such app ideas so that they can con most of us? You have to admit that they are not naive and have a good brain. But they used it negatively, and that's why eventually they got caught. There is another aspect related to fraud when dealing with m-commerce and it is referred to as chargeback fraud.

This occurs when a customer makes a purchase and then changes his mind and asks for a refund. The company initially offered this service but after the customer had asked for a refund, they simply blocked that customer. There are always going to be issues with banking transactions and it comes to chargeback fraud, sometimes when I don't understand how to process. When done legally, the bank may think that the customer is overreacting, and can wait for some time so that the problem can be resolved mutually.

The fraudsters take advantage of these loopholes and con multiple people and run away by closing their website and not leaving any traces behind. Transactions done through m-commerce can also fall into this category. Banks must deploy some strict procedures and checkpoints to ensure this can be done.

Final Word

Automated attacks by malware and bots can also be one of the factors for making a mobile phone make things difficult for you. Mobile merchants and customers should always think about how to connect and safeguard their interests dealing with such situations. The fraud rate, according to merchants, has increased considerably since 2017 and thus posing a serious question for the future of m-commerce.

If you think that you can add something valuable here based on your experience, you are more than welcome. And if you have any questions in mind or just want to offer your feedback, please use the comments section below.

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Nicky James is an online marketing strategist & writing expert with 3+ years of experience, currently associated with Branex digital agency. Nicky got many rewards from different task & strategies as it implemented him.

Los Angeles, CA

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