More Chinese are using the Internet to pay for purchases. (Photo : Getty Images)
Internet mobile payments totaled to about 11.8 trillion yuan ($1.8 trillion) in 2015, signifying that the mobile payments market has boomed in China. While mobile payments increase, iResearch consultancy data revealed that around 326,000 new mobile payments were affected by viruses in the same year.
With over 25 million mobile Internet users caught up in fraud cases, the security of mobile payment processors is now in question.
Although the investigation primarily involves the Internet-based service providers, China Daily reported that practices on the customers' end may amplify the opportunities for fraud. For instance, using the same password or code for multiple accounts would make it easier for fraudsters to hack them. Usage of unknown WiFi connections may also contribute to fraud.
On May 19, Tencent released a report which stated that, in the first quarter of 2016, 70 percent of mobile payment fraud victims were men. Furthermore, salaried men comprised more than 50 percent of the total number of victims. In terms of location, the highest rate of Internet fraud victims is found in Hebei, Shandong and Sichuan.
Fake penalty notifications from legal departments and the police comprised a staggering 38 percent of the total number of fraud cases. Fraudsters who tell mobile users that they are from customer service departments of the utilities or services they subscribe to are also responsible for millions of scam cases.
About 12 percent of the said cases are related to gambling. Online payments associated with illegal business operations accounted for another 10 percent, as reported by China Daily.
Meanwhile, Tencent has an ongoing process of compensating customers who are victims of online payment fraud. The condition for receiving compensation is that the reason behind the fraud must not constitute any negligence on the customer's end, according to Xu Guo'ai, vice general manager of the financial technology department of Tencent.
