M-commerce increases need for fraud prevention

As m-commerce grows, so do security risks and the need for new tools to combat fraud. Those are some of the key findings from the second annual Mobile Payments and Fraud Survey, conducted by Kount.

"After establishing the benchmark last year, the 2014 Mobile Payment & Fraud Survey shows continued development in mobile commerce and risk management initiatives as well as changes in expectations and priorities for the mobile channel," noted David Montague, president & executive consultant, The Fraud Practice. "Not only are organizations now more likely to find that the fraud risk associated with the mobile channel is higher than with standard web eCommerce, but organizations are also more likely to believe the mobile channel requires additional tools for managing risk."

Conducted from November 2013 to January 2014, the Mobile Payments and Fraud Survey had nearly 2000 participants, including merchants, service providers, acquirers, card associations and issuers. Of the 1000 merchants participating, more than half reported annual revenues exceeding $50 million.

The mobile channel now accounts for 20 percent of retailers' business, double that of last year and 66 percent of merchants surveyed now actively support mobile, up by 30 percent year over year.

Merchants that offer a mobile app for online shopping more than doubled from 21 percent to 54 percent, while nearly half now offer a dedicated mobile website.

But there are also more risks: 32 percent of merchants see mobile as riskier than standard e-commerce up from 24 percent last year.

Merchants are also more aware that standard e-commerce fraud processes are not enough for managing mobile channels, as fewer believe that current protocols are sufficient today than a year ago and 32 percent say fraud prevention specific to mobile is increasingly necessary – nearly double the sentiment of last year's responses.

"Clearly mobile commerce is a source of tremendous opportunity for online retailers and their focus on this channel has grown considerably each year," said Don Bush, vice president of Marketing at Kount. "Merchants also realize that fraud follows opportunity, and there may be no greater opportunity for fraud today than in mobile. Protecting and growing your business requires a fraud solution that integrates with all mobile platforms without any impact to the customer experience or your business."

Regarding fraud prevention, survey respondents varied by sector and revenue size about the need for specialized tools. However, more than half considered the ability to detect a mobile device as "very important" and 89 percent of respondents considered it at least "important" or "somewhat important." Despite this sentiment, only 34 percent of those surveyed can detect a mobile device and merchants able to detect the specific type of mobile device decreased from last year.

For more:
-See this Kount press release

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