Are You Ready and Protected for Paym Mobile Payments?

Apr 24, 2021, 17:39 PM by Legacy Post
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The financial services sector has encountered many changes over recent years, making it hard to keep up with ever-evolving customer needs while patching new technology on top of existing legacy systems. However, providers in this sector cannot be dismissed as being behind the times, and they certainly cannot be accused of not trying.

Keeping up with demand is not easy, and the financial services sector – particularly banking – has generally embraced the changes of customer contact and engagement by offering multiple channels to satisfy customer needs. It’s not enough though, banks are desperately trying to hold on to customer loyalty – something that the sector could once be proud of - but is becoming less abundant with a new generation of customers who are not afraid to switch providers, and do so with increasing ease. Banks are therefore determined to offer customers the best possible service in order to keep this loyalty, and retain customers. But, along with this evolution in customer service, banks must also consider the security implications and ensure that they implement relevant technologies, and strategies, to safeguard sensitive customer information.

One recent innovation of note is Paym, a new mobile, peer-to-peer banking solution launched this year in the UK that enables users to quickly send money to anyone else with a mobile number and a Paym account. As of April of this year, most well-known banks and building societies have signed on to support the Paym launch. The few notable exceptions include the Royal Bank of Scotland and NatWest, and Nationwide, all of which are planning later adoptions. This type of mobile banking platform aims to make the process of sending protected payments without disclosing account details as easy as sending an SMS. There are many existing ways of making payments using a mobile phone, however the Payments Council initiative provides the first collaborative effort to link every bank account with a mobile phone number.

A technological and strategic initiative of this magnitude will present inherent risks to both the bank and the consumer, and will provide an opportunity for fraudsters to target this emerging and fast growing remote banking channel with new and inventive methods of deception. Already widespread, fraud factories’ numbers continue to swell, focused primarily on the theft of account holders’ identities.

One of the main challenges banks will need to overcome is making sure that customers have trust in both them and the security of the new payment method. A few things to consider:

  1. Customers have become used to having to jump through hoops to access their online banking, and by removing this, there is bound to be doubt in the customer’s mind that it is secure.
  2. The inconvenience of having a card blocked, or a legitimate card transaction being declined (thus causing the customer embarrassment), highlights the importance of getting this service right.
  3. While banks recognize the opportunity for an additional revenue stream for mobile and remote banking, without the correct security safeguards, a false positive detection could lead to a hampering of revenue streams and consequent reputational damage.
  4. Banks must ensure that they implement a solution to support a robust security process while remaining transparent to the customer through their payment process. Essentially, the less intrusive the process, the better it is.

The introduction of Paym will no doubt cause a stir for both banks and customers alike as this new paradigm struggles to take hold. It’s inevitable that there will be some mishaps due to the large-scale implementation across all banks over a short period of time, but those who have the foresight to ensure that their security is up to par will thrive. Paym will be the latest application to demonstrate which banks are taking their customers’ security seriously and which may need to up their game.