InfoSecurity Magazine: Mobile Fraud Skyrockets, But Merchants Are Unprepared
Despite mobile fraud growing by 81% between 2011 and 2015, nearly four out of 10 merchants (38.5%) say determining if they’ve been victimized is the largest barrier to effectively managing fraud risk.
According to the latest data from the Kount 2016 Mobile Payments & Fraud Survey, the majority of merchants are overwhelmingly incorporating mobile payment options into their online and mobile commerce strategies. But, they are unaware of the type of risks these new technologies bring—let alone what they even look like.
“Despite awareness that the mobile channel poses a greater risk than standard e-commerce, businesses are taking a blanketed approach to their security strategies,” said Don Bush, vice president of marketing at Kount. “Security is an essential part of the consumer experience. And, as we saw with the rampant spread of data breaches, if organizations don’t have a tailored strategy to manage fraud as it evolves, they, and their customers, will be paying for it for years to come.”
As organizations small and large have embraced mobile at similar rates, their focus has remained on finding ways to adapt to mobile that offer more convenience to their targeted audiences, dedicating resources to expanding mobile offerings but sacrificing security in the meantime. Instead, they’re relying on traditional e-commerce protection tools to manage risk in the mobile channel, even when nearly half (41%) acknowledge that m-commerce is riskier.
“Given the introduction and expansion of mobile wallet options such as Android Pay and Samsung Pay over the last year and the dominance of Android devices, it’s interesting to see organizations are adopting Android and iOS payment options at similar rates,” said Steven Casco, CEO of CardNotPresent.com and the CNP Expo. “But some organizations are embracing these options more than others. Card associations and issuers are more than twice as likely as merchants to support mobile wallets, as merchants’ support for mobile payments in-store stayed flat while mobile checkout optimization doubled.”
“Mobile commerce is great for merchants and consumers but it’s also great for fraudsters too,” David Montague, founder, at the Fraud Practice, INC. “Until merchants implement techniques to address the unique characteristics of mobile offerings to keep them safe and secure, they’re leaving the door wide open for fraudsters.”
The report also found that more than 82% of merchants actively support the mobile channel today, up from 54% at the time of the inaugural survey and 69% last year. Mobile importance, acceptance and revenue has jumped: merchants earning at least 30% of revenue in the mobile channel more than tripled to 29% from 9% last year. Among the top five industries that have prioritized mobile the most, surprisingly, the alcohol/tobacco industry tied with more commonly assumed industries such as dating and social sites.
Source: Written by Tara Seals for InfoSecurity Magazine.