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The Two Biggest Obstacles to mCommerce Adoption Are NOT Fraud or Security

posted on: Mon Sep 11 2017

In light of the mobile fraud statistics below, you might think online businesses would be especially fearful of fraud risk in the rapidly-growing mobile channel.Statistics

  • 60% of fraudulent transactions originate from a mobile device, based on research from RSA.
  • The fraud rate for mobile commerce is twice as high as for conventional eCommerce, according to The Fraud Practice.
  • $2.33 in costs for every $1 in fraudulent mobile transactions, per LexisNexis estimates of the “true cost” of mobile fraud.

Not quite. The Mobile Payments & Fraud: 2017 Report reveals instead that the top two obstacles to merchants investing in mCommerce capabilities are:

  1. The cost of implementing new technology - 45%
  2. IT resources required - 44%

Fraud does finish in the top three, with “addressing how to manage fraud risk” at 34%.

Obstacles to Mobile Adoption

Note the pattern here—all three of these fears revolve around technology. Not advertising, not inventory, not pricing. It seems mCommerce is perceived as an IT obstacle course.

Fortunately, there is a way to sidestep the question of technology costs and resources, at least in the fraud arena. Enterprise-class fraud prevention solutions like Kount Complete employ a Software-as-a-Service (SaaS) model. SaaS greatly simplifies fraud prevention and eliminates many costs to ensure predictable profitability.

Simple implementation and low-cost. With SaaS-based mobile commerce fraud prevention, online businesses avoid expensive IT projects. There are no costs for hardware, software, IT infrastructure, and headcount that are associated with in-house, “do-it-yourself” installations. In fact, with Kount, you can be screening and vetting mobile transactions in as little as 10 days—with no capital expense.

Increased mobile conversions and sales. Because fraud prevention is our core business, Kount employs a state-of-the-art SaaS network operations center that optimizes fast, frictionless mobile checkout with an average time to process mobile transactions of just 250-350 milliseconds. That’s essential when you consider that a 1 second delay in page response can result in a 7% reduction in conversions. In addition, the Big Data available to Kount as a result of our processing billions of transactions make it possible to better differentiate between fraudulent transactions and merely suspicious (but legitimate) transactions, resulting in fewer false positives and higher order approval rates.

Scalable capacity. With SaaS, you only pay for what you use. It smoothly scales up or down as your mobile transaction volume rises or falls. You never need to worry about under-spending on an in-house anti-fraud system and leaving your operations vulnerable to fraud during seasonal or promotional surges. Or investing too much and having costly, unused capacity in slack periods.

Minimal admin and rules. Kount’s SaaS solution combines built-in fraud expertise, Artificial Intelligence (AI) and Machine Learning, and easy rule writing to deliver integrated, comprehensive fraud prevention that not only fights mobile fraud, but lowers costs of mobile fraud prevention with automated decisioning that results in significantly fewer manual reviews.

For those online businesses that want an even simpler and easier SaaS solution, many payment service providers—including BlueSnap, Braintree, and Chase Paymentech—integrate Kount Central fraud prevention as a “baked-in” service within their payment processing offering. This makes extending fraud prevention to mobile commerce virtually effortless.

When you consider that card-not-present (CNP) fraud is growing fast, with CNP losses in the US predicted to reach $7.2 billion annually by the end of 2020, you realize how important it is to secure your mobile channel against fraud. When you see just how affordable and easy SaaS can make that effort, the decision to implement becomes much easier.

Discover more about mobile commerce and fraud prevention. Download the eBook: "The Download on Mobile App Fraud". Learn about fraud threats for mobile apps, mobile checkout abandonment issues, and how to increase mobile conversions.

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