As mobile commerce becomes more popular, so will mobile fraud

Here’s a nicely timed little scare story about mobile security. Anti-fraud company 41st Parameter is reporting the emergence of mobile commerce coupled with advanced smartphones will lead to a “groundswell” of m-commerce fraud.

What’s the story?

41st Paramater deals with fraud detection and prevention. It is claiming that the increasing number of channels for mobile commerce will mean that traditional anti-fraud techniques will soon be obsolete. It says that part of the problem is smartphones aren’t yet as sophisticated as computers. Many of the technological innovations that help prevent fraud on a computer won’t work on a smartphone, as it doesn’t support the same, but the

Ori Eisen, founder and chief innovation officer of 41st Parameter says that “the mobile channel is the fastest growing segment of the Internet today. For companies looking to increase their audience potential, conducting business with billions of mobile handsets is compelling. Unfortunately, the mobile channel is equally appealing to cybercriminals, as traditional fraud deterrents won’t identify or differentiate between the growing varieties of smartphones.”

What we think?

I think it’s sensible to maintain a healthy amount of skepticism when an anti-fraud company tells you to be worried about fraud. That’s part of their job after all. It pretty much counts as advertising.

But there is a simple truth to what 41st Parameter is saying here. As mobile commerce is becoming more popular, there will be a lot of people trying to figure out to steal money through it. And since mobile commerce is such a fragmented market, there are probably lots of little cracks (or even big cracks) that someone could worm their in through. As payment methods become more and more focused on ease of use for the consumer, we must be diligent to ensure that ease-of-theft isn’t just as easy. Waving your phone in the air may be enough to pay for a transit ticket in the future – new security measures are needed to ensure the safety of that channel.