Earlier this year, The Daily Telegraph revealed online fraud as the most common crime in the UK.
This comes as no surprise as for some time, credit card fraud has been at alarming levels; losses on UK-issued cards totaled £567.5 million in 2015 and in the first half of 2016, the total losses on payment cards in the UK stood at £321.5 million. This included remote purchase fraud, lost and stolen cards, cards not being received, counterfeit cards and card ID theft.
Credit cards have become an easy target for fraudulent activity when used for online payments; fraudsters don’t even require the physical card that they intend to use, as all they need are the card details to make an online purchase.
Giving consumers the option to pay for services via carrier billing could prevent fraudulent transactions from occurring so frequently. This doesn’t require a credit card, as the costs of purchases are charged to user’s mobile phone bill. This is reassuring for consumers, who won’t have to part with any financial information to make a purchase.
So while credit cards send you running for cover, what are the main security benefits of carrier billing?
- If a purchase has been made via carrier billing, fraud cannot be committed unless the person attempting fraud actually has the device. This means that as long as consumer’s devices are safe, the risk of fraud occurring is greatly minimised.
- Carrier billing uses 2-factor authentication when clients sign up to services or make purchases, which ensures that the phone number is verified and used by the correct person. Furthermore, individuals receive their own personal pin which is only valid once, adding an extra layer of security.
- Fonix’s carrier billing platform has a payment tracking system, monitoring payments in real time. This helps to analyse patterns of payments so that it is obvious when there is an anomaly and someone is spending in an unusual manner.
- This sort of analysis can be done on an individual basis too; platforms can identify whether or not the purchase that a user is making is normal for them, by looking at their user history e.g. how much do they usually spend.
- Carrier billing only allows for a maximum payment of £30 to be made in one go, reducing the damage if fraud is carried out whilst also making it a less-likely target.
- Furthermore, platforms can limit total spend per day or month, ensuring users can’t spend more than the specified amount.
- Platforms can integrate blacklisting/whitelisting tools and block users who have requested refunds — chargeback fraud is one of the most common examples of fraud that merchants encounter when selling services online.
- Established carrier billing platforms keep customer’s personal information protected and unavailable to merchants.
Carrier billing is a truly reliable way for merchants to reduce fraud and a payment method that they should be adopting. This is so important to consumers, but equally important to merchants; ultimately, consumers would spend more if they had the option to choose a payment method that suited them and if they felt that their payments were secure.