11 May 2021
A lot is happening in mobile in southern Asia’s mobile ecosystem: the e-commerce market is growing, the digital divide is still all too present, and an invisible menace is lingering.
Southern Asia has huge potential in the mobile payment market. By 2025, the overall e-commerce market in southeast Asia is expected to reach US$300bn according to the e-Conomy SEA 2020 report by Google. This is the result of an increasing number of overall internet users, with 70% of the SEA population online, and a high mobile internet penetration rate.
Yet from India to Singapore and Thailand, the mobile phone penetration rate is all too heterogeneous. In some countries, mobile has neared its full-peak, giving users access to high-speed internet, exclusive mobile services, and payments by phone. These countries are noticeable as big tech giants have approached them with targeted offers. Companies offering Over-The-Top platforms have been the first to seize the mobile opportunity. Last year, Netflix released a mobile-only subscription plan in India, followed by Amazon also launching its mobile-only subscription plan to its OTT platform this month. The entertainment vertical is proof of the success mobile services can experience in this region.
While in other countries, the mobile disparity remains strong. Among the 1.3 billion population in India, more than half of the 48% women population is unaware of the existence of mobile internet according to GSMA Intelligence. While other countries such as Singapore recorded a mobile internet penetration rate of 83.2% in 2020. This gives mobile operators a window of opportunity to launch payments through mobile in only a few selected regions. Due to this digital divide, the southern Asian region represents today a patchwork of mobile payment adoption that might one day reach harmony if the challenges are correctly approached.
Although southern Asia faces a much bigger obstacle that truly hinders mobile payment’s growth in the region: fraud. Thanks to our cutting-edge technology, we at Evina, have been monitoring fraudulent activity worldwide for the past several years and can testify that fraudsters don’t show sympathy for this region. In fact, 2021 started off with the arrest of fraudsters in India that were implanting malware in malicious mobile apps to collect personal identification and user’s money. According to Evina, southeast Asia also recorded high fraud rates, with Indonesia at 13% and Malaysia at 24%. Why should you care? Mobile fraud doesn’t just steal money from mobile operators, it hinders business growth and it’s currently dividing by five the number of legitimate transactions that would bring you cleaner traffic and more revenue.
All the players involved in the mobile payment process, from merchants to payment gateways and most importantly mobile operators, orchestrators of mobile payment through Direct Carrier Billing (DCB), need to acknowledge these two major challenges and find the right approach adapted to each individual southern Asian country.
Foolproof business growth: a must-have in 2021
To the regional challenges southern Asia faces, the year 2020 adds up issues that have converted into new obstacles for the year to come. No industry was left untouched by the Covid-19 pandemic, the lockdowns and their repercussions, except for the digital industry that served as a safe boat for many businesses. This caused a sharp increase in overall internet traffic and even more so on mobile, giving a safety net to many businesses where they could keep on growing and making money. Fraudsters also had to find a way to re-adapt, which brought them to also target the digital ecosystem. More money flowing is synonymous with more fraud attempts in digital payment. We also aren’t dealing with individual fraudsters anymore, but with a larger group that silently operates: organised crime. With the increase in traffic and money on mobile, organised criminals have also decided the digital world holds many opportunities for them. They have set their intentions to heavily invest in digital monetisation, meaning fraud rates will continue to rise if they are not stopped.
The much-awaited, fast and effective - yet young - 5G network, is the second bump on the road to reaching the full potentiality of mobile payment. Much like its sibling networks 3G and 4G, the new generation presents the same weaknesses in the face of fraud, evermore so considering 5G is still at its infancy stage. This first stage of life means many functions still have to be tested and the network is open to more vulnerabilities as protocols are not 100% foolproof. And fraudsters aren’t thinking of sparing the 5G networks from their tricks. Southeast Asia represents the same disparities in regards to the roll out of 5G, with some countries ready to deploy new infrastructures while others will continue to depend on 4G for the time being. Singapore is leading the 5G way followed by Vietnam, the Philippines, Malaysia, and Thailand . Mobile operators need to keep this in mind and increase security in countries where users are expected to soon connect to a still vulnerable 5G network.
Both the increase in fraud operated by organised crime and the vulnerabilities presented by the 5G’s infancy stage could be prevented and their consequences attenuated if companies in the mobile payment industry make the right security investments. In 2020 many companies didn’t make security their priority, while fraudsters did make cyberattacks theirs.
In addition to the regional challenges MNOs face, when confronting mobile fraud, players must insert themselves into a wider global optic to overcome these challenges correctly.
The global increase in mobile traffic, organised crime investing in digital monetisation, and a vulnerable 5G network at its infant stage make for a gloomy future ahead for this industry, but the situation is brighter than it seems.
The silver-lining of combating mobile fraud in southern Asia
The mobile payment adoption gap between and within countries in southern Asia needs to be mended and resolved and the mobile fraud challenges confronted, for Asian mobile operators to experience the prosperity that derives from a healthy mobile payment ecosystem. But how? We can start by admitting fraud is a problem in southern Asia’s mobile payment. This goes hand in hand with educating the market about fraud, what it looks like, and how to protect businesses.
Mobile fraud education involves the user, the merchants, the payment gateways, and the mobile operators. The importance of protecting mobile users is currently underrated, as fraudsters continuously attack the vulnerable in order to steal their precious data and money. The players of the mobile payment ecosystem need to fully comprehend that users behold the success of businesses as they decide whether complaint rates decrease or rise, and if a business is even worth their attention.
Once educated, mobile operators will realise that they have accumulated a heavy cybersecurity debt, which are the repercussions of not having correctly invested in security. This debt has a great toll on business as it presents itself in the form of increased fraud rates, customer complaint rates and the churn rates. To avoid the risk of inducing a crisis, mobile operators will need to repay these debts by investing in the cybersecurity tools needed to fight fraud.
The choice of the right cybersecurity partner though is crucial. Oftentimes when companies decide to deal with fraud, they resort to counter-productive measures that complexify their billing process by adding security steps that reduce the number of illegitimate transactions yet scare customers away. Too many MNOs deal with their fraud rates by adding security layers such as pin codes, then by restricting media buyers, and in the end almost decide to cut off mobile payment entirely as complaint rates are still on the rise. After integrating our anti-fraud solution, mobile operators who work with us see their complaint rates decrease along with their fraud rate that can drop as low as 1%. More importantly their traffic is clean and they’re able to simplify their billing flow, so that they can now focus on their business.
When the cybersecurity debt will be repaid and when market players will resort to the right partner, mobile players will realise that cybersecurity tools don’t just fend off fraudsters, they reduce complaints, increase happy users, and boost business growth. Results will show faster than you know it. For this to happen, we insist that mobile operators, the influencers of the mobile payment, are the first that need to partner up with an independent, expert, and solid anti-fraud solution company. The benefits of such a solution are that you are able to optimise your subscription instead of managing complaints, and deploy frictionless payment while restoring trust with your partners and users. This solution has a rippling effect, protecting the end user and pressuring the mobile players to unite in protecting this industry. Confronting mobile fraud is a chance for market players to assess the situation, understand that fraud is not only a nuisance but a barrier for business growth, and that tools exist to fight it off the right way. These actions will naturally lead to a more unified mobile ecosystem in southern Asia, where mobile gaps are mended and mobile fraud reduced for a more prosperous regional growth.