Online and mobile payments also present risks to consumers, in particular regarding security. Fraud, deceptive practices and lack of reliability of devices and infrastructures are the main security incidents. Transparency of charges and disclosure of information are also challenging supervisors, from a consumer protection perspective. |
However, security issues are the main obstacles to the use of digital payments. They are referred to as preventing the widespread adoption of e-commerce.21 Surveys to users also indicate concerns about security as one of the main impediments to the adoption of mobile financial services. 22
The most significant concern of security requirements is the prevention of fraud.23 According to the European Central Bank, fraudulent activity is now increasingly moving to remote card transactions, in particular to payments over the internet. 24 The majority of the value of fraud has resulted from card not present (CNP), i.e. transactions made without face-to-face contact between the cardholder and the merchant, a tangible payment card to inspect for security features, or a physical signature on a sales draft to check against the card signature; these are the cases of payments made via internet, post or telephone. CNP fraud has grown faster than CNP transactions.
The European Union (EU) also states that, “though innovative technologies offer opportunities to improve customer service and reduce prices, they may also pose regulatory challenges, particularly in relation to cyber-security and data protection”.25 Cyber threats are a major concern for consumers and businesses; this is likely to grow in importance as digitalisation progresses, and requires an appropriate response.
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