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Summer Solstice Reading: 17 CNP Fraud, Mobile, and eCommerce Facts That May Surprise You

posted on: Mon Jun 20 2016

Summer Solstice Reading: 17 CNP Fraud, Mobile, and eCommerce FactsJune 21st is the longest day of the year, which gives you extra time to browse these interesting, surprising, or thought-provoking data points about CNP fraud, mobile commerce, and eCommerce.

  1. What is the biggest perceived barrier to improving fraud prevention for eCommerce merchants in the apparel & accessory, automotive, food & beverage, electronics, and travel & leisure market segments? The time and cost to integrate or maintain new technology.
  2. The high-cost of DIY technology (or why the cloud is winning): a large retailer started a $1.4 billion effort to modernize its IT systems, but the project had to be abandoned. Falling behind its competitors, the company then initiated a $600 million system for supply-chain management. That effort also failed and the retailer was actually forced to file for bankruptcy.
  3. While the number of mobile apps increased only 12.6% in 2015, mobile sales from apps soared 68.7% (among the Internet Retailer Mobile 500).
  4. There are fewer than 23 weeks until Black Friday. If you’re planning on introducing new eCommerce or fraud prevention capabilities before the holiday season, keep in mind that 1/3 of all large software projects experience delays and 1 in 6 IT projects have a schedule overruns of 70% (Kount is Software-as-a-Solution, typical deployment timeframe is 10-20 days).
  5. Speaking of the holidays, Apple announced that Apple Pay will be coming to Mac desktops and laptops in time for the holiday season. As part of Apple’s update to MacOS Sierra, shoppers using a desktop or laptop Mac will see an Apple Pay on-screen button option appear in their Safari browser when checking out at participating online retailer websites.
  6. An estimated 500 million computer devices are infected via botnet attackers annually, which is around 18 victims infected per second. That means that during the 15 hours and 27 minutes of daylight we’ll see at Kount’s headquarters in Boise on the longest day of the year, 1,0001,160 computers will be compromised.
  7. Five years ago, a mobile app cost $200,000 to develop. Now a fully integrated app with transactional capabilities runs $2 million. Yet most companies apparently aren’t willing to make that kind of investment: 65% spend less than $500,000 annually (i.e., enough for a simple website or app).
  8. What are the top 5 fraud prevention techniques or technologies used by merchants for mCommerce? Rules, Device ID, Fraud Scoring, ID Authentication, and Secure Mobile Payment Methods.
  9. You’ll need to capture MORE THAN YOUR FAIR SHARE of customers to maintain future sales growth: 78% - 92% of U.S. consumers said they will NOT increase their online spending over the next three years (percentages varied depending on product category). And about 25% said they expect to spend less online over the next three years than they currently spend online (Boston Consulting Group survey).
  10. It’s been about 7 months since the EMV rollout began and 12.2% of merchants attribute higher rates of fraud in mobile transactions to EMV, while 41.5% are uncertain if it has had an effect.
  11. Just how brazen are ATM card skimmer fraudsters? Brian Krebs, of Krebs on Security, identified two videos that actually show “how-to” demonstrations of ATM skimming devices.
  12. The 2016 CNP Awards were announced at CNP Expo last month, and for the third year in a row, Kount won the Customer Choice award for Best Antifraud Solution.
  13. The Wendy’s breach that supposedly only affected fewer than 300 of the 5,800 restaurants (i.e., 5% of the chain) is apparently much bigger: “Considerably higher than the 300 restaurants already implicated,” according to company spokesman Bob Bertini.
  14. One in five merchants report that they experienced increased fraud following major data breaches.
  15. The $14.5 billion “Fear of Fraud” sales gap is the difference between the actual fraud rate and the decline rate. That’s the potential revenue lost by eCommerce and mCommerce merchants due to erroneously declining suspicious transactions that were likely valid.
  16. Manual reviews cost the average medium-size merchant ($25 million annual revenue) more than $800,000 a year in operational expenses and wrongly cancelled sales.
  17. A Kount customer in the travel industry did a side-by-side comparison of Kount Complete against their incumbent fraud solution and saw sales gains of 72% to 84% across its four primary product lines…with no increase in fraud (~0.3% chargeback rate).

Hope you enjoyed these factoids, now get out of the sun before you get sunburned!

Mobile Payments & Fraud: 2016 Report