The next level in payment methods currently being used around the world is on its way. The emergence of social networking sites has led to establishment of a full fledged money exchange system for goods online. It means, real goods can be bought with real money using just your social networking identity, with a single click.
However, while some of the worlds largest social networking sites are busy preparing themselves for a big step into the payments industry, there are a few niggles that still need to be fixed.
Problem areas:
Personal information is loosely available
Getting hold of any sensitive cardholder data is not a tough job for hackers nowadays due to rise in consumer "unawareness" on the internet. Sensitive data like birthdays, last School/University attended, favourite people in the world or favourite books etc. All these information are loosely available on the internet. The problem lies where the Banks and Financial institutions use the exact same information for their account holders to authenticate themselves.
Fraud Market
Its a real market out there. Thieves are making huge earnings by just selling the customer sensitive data online to the fraudsters who use it for their benefit. Users continue to freely post their personal information in the so called private online space. With social networking gathers more pace day-by-day, as far as such frauds groups are concerned, they not only do benefit gathering end user data but can also directly put it to use on the same sites now to steal even more money.
Apps or Trojan?
Free apps are available online in numbers, while end users (tempted to make their lives even more easier) download and install such apps without thinking twice. More often then not the apps are trojans which requests basic user information. These rogue pieces of softwares are nothing but malicious codes that continuously gathers the end user data and transmits them back to the criminals. With the Social media payments becoming more lucrative for such gangs to operate, further rise in crimes involving such groups may become hard to avoid.
User Trust
Companies will have to work towards setting up the most robust security service possible to keep the fraudsters away and gain that priceless trust factor. More attention in terms of security of end users might cost them a little extra bucks, but making the end user feel secured in their payments world would be a battle won for the several players who are trying to earn their way into Social media payments market.
Users acceptance
The end user, should not be underestimated at all while the right payment system is being created. If the payment technique integration does not gel with the applications online, it will quickly put the users off. The companies might want to keep users transition from games/shopping online to a completely different mode for payments as smooth as possible. Any deviation from their purpose online may well create an unhappy mood on the web.
Identity theft
Identity thefts result as more and more consumer details are made public. Consumer buying patterns will have visibility on social networking world with little privacy. As users willingly expose their identities on social networking sites, they are also likely to trust the sites with their card numbers and bank details too. Making it more easy for a fraudster to impersonate as a genuine person online.
Rise in phishing attacks
Phishing attacks may rise as fraudsters try the new avenue to lure the consumers into buying their legitimate ideas. With bank account identity directly linked to a person's social network identity, one ID theft can open several other fraud avenues for hackers.
Experience
Financial institutions worldwide have been trying hard for years now to detect fraud early. That, alongside several other issues involving the whole payment services infrastructure, demands quite a bit of experience in this industry. While social networks might have expertise around consumer behaviour patterns and preferences, charge-backs, reversals, fraud payments and various payments processing overheads are on completely different tracks.
Counteractions:
- Limit the amount allowed to be spent. By setting a clear limit might atleast avoid huge monetary losses to the consumers and financial institutions overall.
- The responsibility also lies with the end user by offering as much less personal details online as possible. The users can definitely play a very important role in industry's surge towards cutting down online fraud. If detecting fraud cannot get any simpler, making it easier for fraudsters is something that atleast can be avoided. No one can be de-linked from the social networking world if he/she does not provide minute by minute details of themselves on the internet.
- A trick can be used by the users themselves by presenting a vague picture rather than precise personal information. Instead of using Mothers maiden name, a pet name can be provided. Authors name can be provided instead of favourite books. Favourite teachers initials can be used instead of exact full name. Using information like which color wallpaper you used on your very first mobile phone is not something that hackers can find out easily online.
- Consumers need to be educated more by the companies on downloading and using apps to their benefit as its clearly not the developers responsibility to do that.
- Regularly checking all the movements on personal accounts. This can definitely help the users to better know their spending patterns while allowing the financial institutions to monitor any suspicious behavior too.