Bigger Online Merchants See Bigger Need for Specialized Mobile Anti-Fraud Tools
When it comes to mobile commerce, the Big Dogs are different than the rest of the pack in the online world. Based on results in the Mobile Payments & Fraud: 2017 Report, it seems clear that large online businesses:
- Get more of their revenue from mobile commerce
- Have greater concerns about mobile fraud
- Utilize more resources to deal with mobile commerce and fraud
Let’s start with revenue. According to the Mobile Payments & Fraud: 2017 Report, the larger the online business, the more likely they are to support mobile transactions:
- 92% of merchants with $250 to $500 million in revenue support mobile transactions, which is 39% higher than merchants with revenue under $5 million.
- 83% of merchants with more than $500 million in revenue support mobile transactions, which is 26% higher than merchants with revenue under $5 million.
Further, higher mobile commerce revenue is closely associated with greater technological and reporting capabilities around mobile transactions:
- More than 8 in 10 (84%) large online businesses with annual revenues over $500 million said it’s “Important” or “Very Important” to be able to detect mobile devices in online transactions, which is 35% higher than medium-sized and smaller merchants (annual revenues under $100 million) that considered this capability “Important” or “Very Important”.
That said, it appears that smaller merchants are starting to see the light and plan to catch up with their bigger colleagues:
- Two years ago, just 31% of smaller merchants (annual revenues under $5 million) said mobile commerce was “Very Important” to their revenue goals.
- This year, 56.3% of these smaller merchants said mobile commerce was “Very Important” to their revenue goals.
- 1 in 4 smaller merchants said they plan to add support for the mobile channel in the next 1-2 years.
The Big Dogs’ greater exposure to mobile commerce also means their perceptions of mobile fraud are different from the rest of the pack:
- More than 3 out of 4 of large online businesses (over $500 million in annual sales) said that mobile commerce required specialized fraud tools or that standard eCommerce fraud processes couldn’t fully support mobile transactions. That’s 26% higher than the average for all online businesses.
- Only about 2 out of 3 of smaller merchants (annual revenues under $5 million) said that mobile commerce required specialized fraud tools or that standard eCommerce fraud processes couldn’t fully support mobile transactions.
Merchant size wasn’t the only factor influencing how online businesses perceived mobile fraud. The Mobile Payments & Fraud: 2017 Report indicates that market segment also has an impact. Two segments in particular stand out:
- 53.9% of online merchants in the Automobiles/Auto Parts market segment said mobile commerce was “Far Riskier” or “Somewhat Riskier” than eCommerce, which is more than 2X higher than the overall average.
- 50% of online merchants in the Gaming segment also felt this way.
At the other end of the “perceived risk” spectrum, there were a number of market segments where merchants were more likely to think that mobile commerce was “Less Risky” or on par with traditional eCommerce fraud risks:
- Housewares/Home Furnishings
One development in this year’s survey suggests that online businesses—both larger and smaller—are coming around to a more holistic, comprehensive approach to mobile fraud prevention.
In the past, there was a fairly long list of mobile fraud prevention tools and techniques used by merchants, with no clear favorite emerging. This year, however, there was a distinct trend of merchants choosing “Complete Fraud Platform” as their preferred method of fighting mobile fraud. In fact, more than 2 out of 3 merchants said they currently have a “Complete Fraud Platform” or plan to add one in 2017.
How does your online business compare to other eCommerce operations in different market segments or revenue strata? Download the Mobile Payments & Fraud: 2017 Report to get insights into the latest trends, continuing patterns, and changing behaviors related to mobile commerce.