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ADVANCED PAYMENTS REPORT 2014 – SPONSORED BY

10. The security equilibrium

Security is one of the core foundations of any millions of dollars of fraud losses and additional expenses for
successful payment system. Consumers and banks and other entities involved. They expose the vulnerability of
large industrial scale payment systems to criminals operating from
merchants must have faith that legitimate unreachable jurisdictions in a world that is increasingly connected.

transactions will be completed and that their The results of our 2014 survey are largely unchanged from 2013.
confdential data will be secured from those who As shown in the chart below, respondents continue to believe that
would want to use it for unauthorized purposes. security is a key concern with mobile and online payments but that
it must be balanced with the consumer experience (see chart).

Over the years, we have seen fraud migrate from one of small As our survey respondents agree, no technology is completely
incidents to large, organized data breaches that have compromised secure, and the majority do not believe that the security question
millions of accounts. These breaches have targeted a broad is overhyped. Cyber-fraudsters today are likely to be highly tech-
spectrum of payments participants, such as merchants, large savvy individuals working as part of organised criminal gangs, and
processors and providers of online services like email and search. they will probe the defences of a secure system until they fnd weak
points that can be exploited.
The recent breaches at multiple US merchants over the past holiday
season clearly highlight that the vulnerabilities within the payment As payment systems continue to migrate to cloud based solutions, the
system are not just online, but also at POS. industry will have to fnd new ways to protect the client’s information.
These breaches erode consumer confdence and can result in

Security in mobile payments

(% of respondents who agree or strongly agree)

88%
There should be a balance between consumer experience and security
91%
89%
No payments can be 100% secure – so consumer protection against 83%
fraud should be ofered as it is on payment cards 85%
88%
2014
Security is the biggest concern with mobile and online payments in the 68% 2013
future 67% 2012
81%
37%
Security is overhyped – it is mainly a customer perception issue 40%
34%
0%
20%
40%
60%
80%
100%

22 www.edgardunn.com | www.paymentscardsandmobile.com Edgar, Dunn & Company in association with Payments Cards and Mobile