The latest statistics highlighting the growth in mobile payments make exciting reading: in the US, m-commerce is double figures with 10% of total online sales, while in Europe the corresponding figure is 8%. Douglas Blakey reports
Outside the developed markets of Europe and the US, the stats are even more eye-catching with eCommerce Europe reporting that more than half of mobile users in Asia have shopped, and intend to continue doing so, via their mobile device.
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Challenges remain notably relating to security. A study earlier this year from VocaLink found that 38% of respondents are not interested in m-payments because mobile phones can be lost easily.
Research from ReD, specialists infraud prevention and payment services, makes the fair point that for many users, smartphone security does not yet match traditional computer security.
In addition, technical security measures are less common, operating systems are updated less frequently and mobile social networking applications sometimes lack detailed privacy controls.
In particular, ReD flags up the Trustwave Global Security Report showing a 400% increase in malware for mobile devices, with retail, food and beverage and hospitality sectors being the main targets.
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By GlobalDataThis is to be expected. Any new channel will be a focus for criminal attacks, whether these criminals target the storage and communication of data or simply steal the means of payment.
This will no doubt represent an encouraging opportunity for ReD and firms operating in this space to grow their business from fraud prevention teams looking to allay consumer concerns about security.
ReD reports that authorisation declines for mobile users are on average twice as high as for non-mobile users – and speculates that, at least in part, this is due to the fact that mobile applications do not save credit card information within user profiles.
As it notes, although an option, 3D Secure authentication is a more significant challenge on mobile, making it harder for merchants to obtain the liability shift that implementation of the protocol brings.
With the mobile channel becoming increasingly important as a source of revenue, ReD’s risk analysts now review mobile customer behaviour as part of its standard risk reviews.
In conclusion, ReD makes the perfectly valid point that fraud rules need to be tailored to take account of the particular challenges that the mobile channel represents for fraud detection.
With omnichannel becoming increasingly the buzz word, fraud strategy will also have to operate across multiple channels – to ensure that customers moving between sales channels have a consistent, high quality customer experience and to enable merchants to identify and track threats across their customer relationships.
Other challenges, such as improving the customer experience and making that consistent – purchasing something as simple as a railway ticket on certain UK rail franchises is anything between a challenge and an impossibility – is a subject for another day.
