As India braces for surge in mobile payment transaction, risk of frauds to surge by 60-65% in 2017: Report

Prime Minister Narendra Modi in his recent rally in Gujarat vowed to convert mobile into E-wallet.But as India goes from less-cash to cashless economy, a report by ASSOCHAM-EY raises some serious concerns. the reports says that India to witness 60-65% rise in mobile frauds by 2017.

 The study titled, ‘Strategic National Measures to Combat Cybercrime,’ also noted that there has been a six-fold increase in credit and debit card fraud cases over the past three years. About 46 per cent complaints of online banking are related to credit/debit card fraud. While 39 per cent of complaints are of  Facebook related complaints (morphed pictures/cyber stalking/cyber bullying). Other cyber issues were cheating through mobile (21%), hacking of e-mail ID (18%), abusive/offensive/obscene calls and SMS (12%), and others.

 Mobile payment transaction volume to reach Rs 153 billion by FY22

The mobile payment transaction volume is likely to register a compounded growth rate of over 90 per cent to reach 153 billion by FY22, driven bydemonetisation of Rs 500 and Rs 1,000 notes, a study  said.

 This is against a meagre 3 billion transactions in FY16,as per the ASSOCHAM-RNCOS joint study. Mobile payment transaction value in India is also likely to register over 150 per cent CAGR and cross Rs 2,000 trillion by FY22 from just over Rs 8 trillion as of FY16, the studyt itled 'Indian M-wallet market' said.

The digital payment sector might register unprecedented growth, thereby replacing traditional cards and cash as theprimary payment method over the next several years but what isrequired is to make such systems more foolproof, Assocham Secretary General DS Rawat said. "Flagship government initiatives such as Digital India,together with Union government's announcement on demonetisingRs 500 and Rs 1000 denomination notes will act as keycatalysts and enablers of this transformation, more so withever-increasing internet and mobile penetration as adoption ofdigital payments is all set to witness a massive surge in thecoming years," he added.

With over one billion mobile subscribers, India has apromising potential for internet on mobile and the same isexpected for payments and business transactions on mobile, hesaid. Mobile banking segment contributed largest share of 49 percent in Indian mobile payment market with over 386 milliontransactions worth Rs 4,000 billion in FY16, with majoritybeing money transfers, the study noted. Besides, share of mobile banking in mobile-payment markethas increased tremendously from eight per cent in FY14 to 49per cent in FY16.

More from report as India goes digital

As the nation embarks to connect over 1.2 billion people and leapfrog into next generation infrastructure including smart cities, millions of people, devices and machines are getting hyper-connected across India every day. Enormous amount of real-time information is moving across the ever expanding network at increasing speeds.

From critical communications network to power distribution to financial well-being of the nation depends on the robustness of the cyber network. Each day, there are growing reports of spread of malware, misinformation and systemic cyber-attacks. These malicious forces know no physical boundaries. This is a huge challenge and needs unprecedented collective action. Indeed, it is now a paramount national priority.

While India is in the process of defining key initiatives with regard to cybersecurity, many mature countries have already implemented various key initiatives aimed at the improvement of critical infrastructure for cybersecurity and addressing cybercrime.

The Government should provide well defined citizen awareness programs aimed at preventing cybercrime as a proactive mitigation. Cybercrime awareness shall be introduced in academics in the early stages of education as a mandate for all the state and central, and public and private schools. Mechanisms shall be established for independent monitoring of awareness program at regular intervals to evaluate the number of people/regions covered. Awareness material shall be updated regularly to cover up-to-date information.