Preventing Fraud Using Mobile Application Payments

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Do you use a mobile wallet application? Would you use it for paying for gas at the pump? If you said yes, youre not alone.

Two gas stations in California are testing a mobile wallet system with the hopes of increasing sales and customer retention. This mobile wallet application lets consumers pay for gas with their smartphones by using a QR code.

The California-based company, Kuapay, created this mobile application with the goal of eliminating the fraud risk of credit card skimmers and speeding up the convenience store process with its secure point-of-sale technology.

Consumers are prompted by a QR code at the pump. They must download the application on their smartphone and connect a credit card to pay at the pump. Kuapay claims to be twice as fast as a debit or cash transaction.


Kuapay also claims that they provide industry leading protection and fraud detection in mobile payments. Users are required to use a pin number to enter the application. To create an account users must enter their full name, email address and create a password.

The problem we see with this application is its lack of identity verification. Anyone can create an account and load a credit card without verifying they are indeed the true cardholder. Being able to easily load credit card information into a mobile wallet is likely to be manipulated with stolen credit cards due to the lack of security and id authentication present at account creation. While this growing form of payment is moving into retail shops and restaurants, the caution is in the authenticity of the credit card and payment being used.

Overall, well have to wait and see if fraudsters decide to take advantage of this mobile wallet and mobile payment technology or not. If they do, mobile wallet application companies will need to add more layers of security to prevent fraud and enhance identity verification and authentication within their apps.

[Contributed by EVS Marketing]