Security has been a growing concern for retailers as data breaches continue to hit major industry brands. Target's 2013 breach marks the moment brick-and-mortar retailers were forced to take real notice of how secure their customers' information was, but more recent concerns over Apple Pay's security and Starbucks' app hack have brought fraud to the fore as an issue for mobile as well.
It's somewhat disheartening, then, that the results of the "Mobile Payments and Fraud: 2015 Report" conducted by Kount, The Fraud Practice and CardNotPresent.com indicate that m-commerce merchants aren't prioritizing fraud security as much as their customers.
According to the new research, many businesses are eager to expand their mobile channels, as 27 percent expressed a desire to add mobile apps for online shopping and 18 percent aim to launch a dedicated mobile site by the end of the year. But for all that mobile growth, nearly a third of merchants have no plans to build out their tools and services to fight mobile fraud.
This is apparently due to the belief that m-commerce isn't inherently more vulnerable than other digital channels.
"Organizations today are more likely to indicate the mobile channel is less risky or equally as risky as standard e-commerce and more likely to state that standard e-commerce fraud processes can support the mobile channel compared to last year's survey," the report noted.
At the same time, less than 40 percent of retailers distinguish between fraud losses on mobile versus e-commerce in general, while 61 percent have no idea if mobile fraud is growing faster or slower than their mobile transaction volume.
What they are certain about is the desire to be able to implement more mobile payment technology in-store. Thirty-one percent of merchants currently accept mobile payments at the point of sale, while an additional 37 percent plan to by the end of the year, making it the most widespread new initiative this year.
If retailers really want to engage more shoppers with mobile payments, though, they should start prioritizing fraud security. Fear of fraud was a major factor in slowing the adoption of mobile payments, according to an Experian study published earlier this year. Forty-six percent of those surveyed were wary of identity theft online, while 60 percent said they had no malware protection on their mobile devices.
That lack of urgency on the part of mobile retailers also flies in the face of research conducted by TeleSign and RSA in February. The results indicated that mobile fraud posed a $240 million threat, despite many merchants believing they had adequate systems in place to detect breaches.
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