Retailers are not yet balancing the risks and opportunities of mobile

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More retailers are enjoying the benefits of mobile commerce – but many are not yet doing enough to counteract the fraud risks that come with this opportunity, a new study suggests.

The third-annual Mobile Payments & Fraud: 2015 Report, commissioned by Kount, The Fraud Practice and, found that the number of retailers actively supporting mobile commerce, continued to climb, with 68.7% ( compared to 63.6% last year) of all retailers now supporting mobile commerce and a further 20.5% (compared to 24.7% last year) planning to support it from this year.

M-commerce is particularly important to larger merchants: 57% of those with annual revenues of $50m (£32.4m) or more say their mobile strategies are very important, compared to 31% of those with revenues of less than $5m (£3.4m). Some 89.1% of respondents say the channel is very or somewhat important for their growth plans, up from 83.5% last year.

Asked how consumers preferred to pay via their mobile device, 62.6% named credit cards, 14.5% debit cards and 13.5% PayPal. The biggest obstacle to mobile adoption, said 27.8% of the nearly 1,500 respondents to the study, which questioned fraud and payment professionals representing retailers, fraud and ecommerce service providers, card issuers and card associations, was making it easier for consumers to transact. Other barriers included the complexity of new payment types, named by 19.5% – and up from 7.9% in last year's study. Working out how to address the fraud risk was a challenge for 11.3%, down from 20.1% last year.

But while addressing fraud risks has become less of a priority, fewer than 40% (39.4%) of merchants said they were tracking fraud by channel, while 34.2% were uncertain whether they were. Merchants with annual revenues of at least $50m were more likely to track fraud attempts and losses by channel than those with lower revenues. Meanwhile, most respondents (61.0%) were uncertain whether fraud was increasing in their mobile channel; 4.8% said it was decreasing, and 13.2% said they were increasing.

When asked if the mobile channel demanded extra tools to manage fraud risk, 28.4% said standard ecommerce fraud processes and tools were enough, while 47.4% said it did require extra tools because standard ecommerce fraud processes and tools could not support it fully. Some 24.2% said mobile required very specialised fraud tools.

Don Bush, VP Marketing at Kount commented that; "Different channels have different challenges. Merchants need to be aware that fighting mobile fraud requires specialized tools, which is something Kount has been advocating for a long time now. Not securing a mobile channel with specific tools will leave a merchant vulnerable."

Of the almost 1,500 people questioned for the study between November 2014 and January 2015, 51.3% were retailers operating in sectors including clothing and accessories, sold by 45.4%, homewares (23.4%), health and beauty products (23.1%) and computers and electronics (20.7%). Some 63% of those questioned had been selling online for at least five years.

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