How to win the battle against digital payment fraud

Stay aware, stay secure

Without the necessary awareness, freedom is dangerous.

We live in a world where the advancement of technology has burgeoned. With it, the method of payments has metamorphized from traditional cash payments to modern digitized payments. The growth of digital payments has grown to 68 percent of Indian consumers, who are now using online or mobile banking apps to conduct their financial transactions, according to a new report from financial technology leader FIS. The boom in digital payments has also made consumers more vulnerable to digital fraud. With the increase in freedom to pick their mode of payment, their lack of complete awareness causes them to become prey to these cyber predators.

How can digital fraud be avoided?

By taking certain precautions, one’s likelihood to become a victim of cyber fraud reduces drastically. Cyber Thieves look for glitches or loopholes to gather sensitive information such as bank details, credit card, pin information, UPI pin, and online wallet details. The financial frauds were majoritively through phishing and QR code/UPI scams, but consumers were also victims of card scams and skimming.

How a consumer can avoid fraud:

  • Do not share confidential details. Details such as card number, pin, expiry date & OTP should always remain classified.
  • Make transactions with reputed and certified agents only. It is prudent to make payments from trusted e-commerce retailers and marketplaces only.
  • Use passwords that are difficult to hack. Ensure that the password you set is complex and contains alphabets in both upper and lower case, numerals, and symbols. In the case of numerics do not use numbers easy to guess (such as birth date or mobile number)
  • Keep an eye on fraud/spam warnings. Several digital payment applications send out notifications or messages to let the user know about the different types of spam calls or messages which lure the consumer into sharing their details.
  • Always communicate with an official helpline contact number.
  • Use an HTTPS website and two-factor authentication when purchasing from an e-commerce website.
  • Be alert when receiving an email or text for any kind of transaction and check if the amount that you are transacting is being debited or credited.

How can you avoid fraud as an online merchant?

  • Encrypt all transactions and emails containing confidential information.
  • Partner with a certified payment processor.
  • Run frequent security checks with antivirus software.
  • Require a customer to have a separate log-in while making a payment.
  • Spread awareness of the different trends in spam and fraud.
  • Educate and train employees to spot the signs of fraud that they need to be aware of.
  • Keep updating your company’s incident response (how your company responds in the case of fraud).

Awareness is the greatest agent of change.

-Eckhart Tolle

Bringing awareness to consumers is a responsibility that is undertaken by both the Government and brands. Different kinds of campaigns are carried out to educate the masses on how they can be aware to avoid becoming a cybercrime victim. Following are the initiatives that have been taken:

  • The National Payments Corporation of India has carried out a #fraudpefullstop campaign through which they share guidelines on how to be protected against scams and an initiative creating a video displaying the different dialogues a fraudster uses to extract personal information. The RBI(Reserve Bank of India) also roped in Olympic Gold medalist Neeraj Chopra to promote how small actions can prevent a huge amount of damage. The RBI has also created a report called ‘BeAware’ on the different forms of frauds and how each of them can be avoided, which has been made available online for everyone to be educated on the same.
  • Brands such as Paytm, which boasts 4 million followers on Instagram, promote quirky and informative posts to frequently update their following with anti-fraud methods. PhonePe, Flipkart, Bajaj Finserv are other such companies that have also adopted this technique to bring about awareness. Banks too have been taking initiatives. Key market players such as HDFC, Standard Chartered have also stepped in to inform users about the different scams taking place in banking. HDFC carried out a campaign known as ‘Muh Band Rako’ which talks about the alarming rate at which fraudulent transactions are rising and urges users not to reveal their information. Standard Chartered Bank has given a detailed article on how to prepare for the fraud taking place on their website.

Payment fraud harms both the consumer and the retailer. The customer faces monetary damage and does not form a pleasant experience with digital payments. The retailer faces damage to his company’s brand image which reduces the chance of having recurring customers or gaining new customers. Hence it is always good to be alert, for, caution minimizes loss.

mBnk with its powerful Fin-Tech application is enabling financial services for the underbanked and underserved sections of the society.