F5 predicts: Mobile payments go beyond mainstream

According to research by IDC, 1.5 billion smartphones will be in use globally by 2017. Consumers will be doing more than ever on their smartphones. As a result, more businesses recognize the importance of delivering quick and seamless mobile payment capabilities to cater to consumers who demand the ability to transact when, where and how they choose.


A growing trend

Gartner’s Forecast: Mobile Payment, Worldwide, 2013 Update predicted that worldwide mobile payment transaction values would reach $235.4 billion that year, a 44 percent increase from 2012’s $163.1 billion, while mobile payment users worldwide will reach 245.2 million in 2013, up from 200.8 million in 2012.

For the end user, having the ability to conduct payments on mobile is extremely convenient. For businesses and financial institutions, the convenience and security of mobile payments can bring new revenue sources via e-commerce, and enhance customer loyalty through programs that leverage on mobile consumers’ data.
There are two primary types of mobile payments; those made at the physical point of sale (POS), and in the e-commerce environment, defined as proximity payments and remote payments respectively. Remote payment is when a mobile device is used to access the payment back-end system via mobile communication networks and complete the payment behavior. Proximity payment is a contactless payment, where a mobile device is used to realize information exchange and complete payment by way of short-range communications technologies. 


Opportunity in mobile payments

The hospitality industry has been quick to embrace mobile payment technology as operators seek industry-tailored mobile solutions that improve efficiency, boost profitability, and increase guest satisfaction. Case in point: Gaylord Hotels’  poolside ordering and payment uses an iPod Touch, featuring mobile POS software and an attachment that allows the server to scan, collect payment and print a receipt from anywhere, so guests never have to leave their cabana.

Retailers in the US are also jumping on the bandwagon. Walmart, Target, and a dozen more retailers have teamed up as the Merchant Customer Exchange, to develop a mobile application that allows customers to pay for goods at participating stores' registers with their smartphones. The app also gives users exclusive coupons and deals.

A personal experience that struck me as game changing was in the public transportation sector. While in a taxi in the USA, I was able to make payment using the taxi driver’s iPad, which came equip with payment software and an attachment to swipe cards. Upon approval, an email receipt was sent to me.


Security of mobile payments

The future of mobile payments offers unrivalled opportunity for businesses, but ensuring its security is vital to maintain consumers’ trust. End users expect secure access to services from any device. With application security growing increasingly threatened, fraud prevention in this area is top priority. Ultimately, non-intrusive clientless verification of fraud activity helps both businesses and consumers.

Research and Markets expects total fraud detection market to grow from $3.61 billion in 2013 to $7.55 billion by 2018, driven by increasing cyber attacks across multiple sectors, including financial services, online retail, travel, ticketing, entertainment, social networking and gaming.

Here is where F5’s Fraud Protection solution, which includes MobileSafe™, comes into play. Offering focused protection against advanced mobile threats, F5’s MobileSafe™ is an SDK that integrates with native mobile applications to protect smartphone users. Especially pertinent in online banking and e-retail, this unique service detects malware and jail broken devices, and protects against key loggers and fraudulent applications, while ensuring information intercepted by malicious programs will be rendered useless to an attacker.

Cybercrime costs businesses approximately US$400 billion worldwide. In Singapore alone, the cost of cybercrime is estimated at US$1 billion (SG$1.25 billion), which accounts for almost 0.41% of Singapore’s annual GDP, according to a new report from Center for Strategic and International Studies (CSIS). These staggering statistics highlight the growing need for a robust security infrastructure beyond traditional firewalls, which were never built for mobile age. Hence, the IT security infrastructure needs to be augmented with state of art defenses like Fraud Detection to ensure necessary protection for mobile transactions and sophisticated user access controls. Rethinking this security and enhancing its infrastructure, F5 Networks takes into account the needs of the demanding smartphone user who wants to securely work and play on his/her device of choice.

With F5’s Fraud Protection solution, and others like it, businesses and end users will be more comfortable when adopting mobile payment services.

Published Jul 09, 2014
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