Mobile Payments Revolutionize Authorizations, But Fraud Risks Remain

The Convenience of Mobile Payments Comes with Increased Risk of Fraud

A new era of mobile payments has brought about a significant shift in the way we authorize transactions. However, this convenience comes with an increased risk of fraud. According to recent figures from Danmarks Nationalbank, the total value of fraudulent transactions using counterfeit payment cards in Denmark reached approximately kr. 124 million in 2023.

Delegated Authentication and the Rise of Wallet Payments

The rise of wallet payments, such as Apple Pay and Google Pay, has made it easier for card issuers to use delegated authentication, where two-factor authentication is carried out within the wallet provider’s environment. This has led to an increase in fraud cases where scammers trick cardholders into authorizing digitalization of their payment cards on the scammer’s mobile phone.

Payment Card Fraud on the Rise

The value of payment card fraud in Danish physical trade has doubled since 2021, largely due to the fact that fraudsters and scammers are increasingly able to make payments without using PINs. In 2023, approximately kr. 14.3 million was lost to payment card fraud, with a significant portion of this being attributed to wallet payment fraud.

Credit Transfer Fraud: A Growing Concern

Credit transfer fraud is also on the rise, with the total value reaching approximately kr. 333 million in 2023. This type of fraud typically involves financial scams where account holders are tricked into making transfers, and can result in large losses if not detected early.

Prevention Measures and Expert Warnings

Financial institutions and authorities have taken steps to prevent these types of fraud, including educating cardholders on how to protect themselves from digital scams. Despite these efforts, the risk of fraud remains a significant concern as mobile payments continue to evolve.

Key Statistics:

Total value of fraudulent transactions using counterfeit payment cards in Denmark reached approximately kr. 124 million in 2023.
Value of payment card fraud in Danish physical trade doubled since 2021, reaching approximately kr. 14.3 million in 2023.
Credit transfer fraud totalled approximately kr. 333 million in 2023.
Average value of payment card fraud was just under kr. 1,300 in 2023.
Average value of credit transfer fraud was approximately kr. 35,300 in 2023.

Expert Warnings

As mobile payments become increasingly popular, experts are warning of an increased risk of fraud. “The convenience of mobile payments has made it easier for scammers to target unsuspecting victims,” said a spokesperson from Danmarks Nationalbank. “It’s essential that cardholders take steps to protect themselves and stay vigilant against fraudulent activity.”