This article in Fintechnews Singapore combines a lot of disparate sources to sketch a picture of fraud. It combines surveys that measure increased use of digital payment methods, consumer research that indicates worry regarding potential fraud, bank data from Vietnam that identifies the rapid adoption of mobile payments, and Visa research that measures how worried banks are about fraud. If that wasn’t enough, it also relies on a FICO survey of banks that indicate 78% of them have seen increased fraud “with the introduction of real-time payment platforms, including P2P transfers and mobile payments.”
This salad is used to introduce the increased need for Hardware Security Modules (HSMs), but HSMs implement encryption. The lack of encryption, or poor encryption, is far less likely to be the vector used by criminals to commit fraud versus social engineering. Investments in identity, authentication, and AI-based fraud detection tools are far more likely to help:
“In the Philippines, digital payments have soared since the country’s quarantine restrictions have been the world’s longest after being first imposed in March 2020. The country’s largest provider of mobile money services, GCash, reported in May 2020 that the total amount of payments through its platform had increased eightfold from the previous year.
In Vietnam, banks are seeing a jump in digital banking usage and digital payments amid COVID-19. In the first seven months of 2020, Vietnam International Bank (VIB) saw the number of transactions made on its mobile banking app MyVIB skyrocket by 120% and regular users increase by 80%. Similarly, the Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) reported that 40% of its customers performed online transactions on its digital banking platforms in August, up 25% from before the pandemic.
And in Indonesia, digital transactions on four major e-commerce sites are projected to double to US$29 billion in 2020, more than double the total transaction value of last year, according to a study from Bank Indonesia.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group