Growing Mobile Channel Offers Opportunities For Merchants… and Fraudsters

mobile_payments_fraud_surveyDon Bush is Vice President of Marketing at fraud and risk management solutions provider Kount who recently interviewed 2000 merchants globally in the largest survey of its kind.

Here Don shares the findings of the report, revealing that while the growth of the mobile channel is beyond doubt, so too is concern about the opportunities for fraudulent activities, with a third of interviewees seeing mobile as a riskier proposition than standard e-commerce.

Good news: the mobile channel is growing in importance and revenue for merchants. But, so too is fear of fraudulent attacks, as merchants come to realise that combating this risk requires specialised tools.

These were the top-level findings of the largest mobile fraud survey ever, which we recently published alongside our friends at and The Fraud Practice.

We wanted to gather real insights into the issues facing industry bodies and merchants today and captured the views of nearly 2,000 participants worldwide, focussing on the current state of the mobile sales environment; seeing where the future lies for merchants and service providers in the mobile arena.

First of all, we can see that the mobile channel is growing; in fact, it accounts for 20% of our respondents’ business – double that of last year. Support for the mobile channel is also up by 30% year on year, with two-thirds of merchants surveyed now actively supporting mobile, prompting a proliferation of mobile shopping app and webpage offerings.

“Fraud follows opportunity, and there may be no greater opportunity for fraud today than in mobile”

It’s brilliant to see merchants getting on board with mobile and using it to grow their business, but as it becomes more prevalent across industries, enterprises need to be able to handle new payment types specific to the platform. Consumers want the mobile experience to be at least as smooth and secure as the traditional desktop portal or POS.

One thing that is crucial for mobile, alongside the most powerful fraud prevention on the market, is speed. Consumers are increasingly demanding a near real-time purchase, no matter their device, and this level of demand needs to be matched by a trusted one-stop shop solution that doesn’t compromise on security.

E-commerce in particular depends so much on the level of trust that the consumer has in your user-friendly interface and fast, secure back-end technology to automate and simplify the process. In some encouraging news for industry bodies, merchants and consumers alike, it appears that awareness of the potential risks is increasing. A third see mobile as riskier than standard e-commerce, while those who believe that standard e-commerce fraud processes are enough for managing mobile channel risk fell from 37% to 26%. This is further evidence that the industry is recognising and arming itself with fraud prevention specific to mobile (indeed, 32% say it is increasingly necessary – nearly double the sentiment of last year’s responses).

Now, let’s take a closer look at the thoughts and concerns of certain industries. When asked if mobile was riskier than standard ecommerce, the three most concerned sectors were money movement, travel, and financial services, who reported that it was ‘far riskier’ than the previous year. Interestingly, across 24 industries, those who felt mobile fraud was less risky than standard ecommerce were confined to single figures (0% – 8%), with the exception of dating/social sites, with 29% believing it was actually less risky.

Don BushDon Bush

Vice President Marketing


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What is driving this concern? The main reason is simply that fraud follows opportunity, and there may be no greater opportunity for fraud today than in mobile. As a relatively new platform that continues to drive deeper into new and existing markets, its potential is still being unlocked, whether it’s for communications, banking and payments, retail, gaming, social media or more. New applications are developed every day, opening up new opportunities on a constant basis. It’s an exciting time for sure, but there will always be those who try to take advantage of security holes in order to defraud legitimate businesses and customers.

It’s abundantly clear that mobile is the future, but it’s not yet a settled channel. However, your fraud protection strategy should be, irrespective of the device.

Register here to download a free copy of the 2014 Mobile Payments & Fraud Survey Report.

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