Merchants Dialing Back Mobile Wallet Acceptance, Survey Finds

14-June-2018

Apple Pay is on the decline.

Fewer merchants are accepting Apple Pay, Google Pay and other mobile wallets this year compared to 2017, and many don’t have any way to detect or track fraudulent mobile transactions, according to research released today by fraud-detection firm Kount and consulting firm The Fraud Practice LLC. The survey of almost 600 merchants found that between 2017 and 2018, the percentage accepting Apple Pay fell from 48% to 35% and the percentage accepting Google Pay sank from 38% to 25%.

It also found that over a third of merchants (35%) don’t track mobile fraud or even know whether attempts at mobile fraud have increased or decreased. “For the third consecutive year, merchants are showing signs of complacency and even regression in terms of managing mobile fraud risk,” Kount Vice President of Marketing Don Bush said. “Despite the increase in mobile fraud and the evolution of tactics carried out by criminals to commit fraud in this channel, the number of merchants implementing specialized tools has decreased, demonstrating that merchants struggle to properly address fraud in the mobile channel including both apps and mobile browsers.”

Although the data showed that merchants increasingly support modern payment methods such as near-field communications, payments made through social media channels and even mobile wallets, the decline in merchant support for Apple Pay and Google Pay, as well as plateaus in the rate of acceptance of Samsung Pay, Visa Checkout, MasterPass and Chase Pay suggested that the realities of day-to-day use may be frustrating some.

One of the most commonly cited challenges by mobile channel merchants was maintaining ease of use for the customer (60%). About a quarter of merchants said their mobile checkout abandonment rate was more than 40%, and about one in 10 (11%) reported mobile abandonment rates of at least 60%. But fraud appears to be the elephant in the room for many merchants.

About half (52%) are using third-party tools or service providers to detect and manage mobile fraud, but a third either do it themselves or not at all, according to the survey.

“Fifteen percent of respondents were uncertain, suggesting little or no fraud prevention strategy,” the study added.

“It’s been remarkably insightful to compare data across the six years of this study, enabling us to monitor trends around support for mobile commerce and risk management as well as areas of weakness and concern expressed by merchants over this time,” said Justin McDonald, who is a senior risk management consultant at The Fraud Practice. “While merchants are more likely to distinguish between a mobile and desktop transaction today than they were two years ago, fewer are taking the next step to secure the mobile channel with a dedicated fraud strategy. Although mobile fraud attempts increased for 60% of merchants last year, just 17% employ a separate risk management strategy for the mobile channel.”

Merchants nonetheless expect the mobile channel to become even more valuable. Nearly a third of merchants believe at least half their revenues will come via smartphone by 2020.