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Never mind the Twelve Days of Christmas — here are twelve essential facts that all retailers should know about the m-commerce revolution and mobile payments going into 2017.
- This holiday season, more than 40% of web-based purchases will be made on a mobile device (Direct Agents)
- PayPal saw a 56% year-on-year increase in mobile payment transactions last quarter (PayPal Q3 earnings)
- Total sales from smartphones are projected to soar 78.3% in 2016 (eMarketer)
- US retail m-commerce is projected to have jumped 43.2% overall in 2016 (eMarketer)
- Next year, global m-commerce is expected to top $720 billion (Statista)
- Two-thirds of the world’s mobile shoppers are aged 16-34, a prime buying demographic (Direct Agents)
- 40% of millennials will shop on a mobile device this holiday season (Business Wire)
- Mobile transactions are twice as likely to involve fraud (Fraud Practice)
- Close to four in ten merchants can’t tell whether a transaction originates from a mobile device (Kount)
- Two out of three merchants think that mobile transactions require more than standard e-commerce fraud prevention processes and tools (Kount)
- Nearly two in five merchants aren’t aware whether their company has a mobile fraud problem (Kount)
- 30% of all online shopping happens on mobile devices (Google Analytics)
With these figures in mind, how can retailers equip themselves to tackle the problem of mobile fraud, while still taking advantage of the boom in m-commerce? Kount, a leading innovator in fraud and risk management solutions, has launched an in-depth industry report in association with The Fraud Practice and Card Not Present which dives into the issue of mobile fraud.
The Mobile Payments and Fraud: 2016 Report provides key industry insights and data to help retailers make sense of how mobile commerce may be affecting them over the holiday period holidays. These include:
Greater risk and uncertainty with mobile. 8% of merchants said that mobile commerce is riskier than standard eCommerce, and another 11.5% reported increasing mobile fraud. But almost half (49.1%) were uncertain if fraud is increasing or decreasing.
Higher fraud losses with mobile. Increased holiday sales from mobile transactions may sound jolly. But the Fraud Practice warns that fraud losses from mobile transactions can be two times higher than from conventional eCommerce (1.32% of revenue vs. 0.68% from revenue). What’s more, 43% of merchants said they didn’t know what share of their total fraud losses occurred in the mobile channel. That could mean some ugly January chargeback surprises.
Greater complexity with mobile. Retailers who are struggling to process higher mobile volumes this holiday season might like to know that they’re not alone. 64.5% of merchants thought mobile transactions require more than standard eCommerce fraud prevention processes and tools, and 20% said that mobile requires very specialized fraud prevention tools.
Higher operational costs with mobile. Most merchants said they increased the number of standalone tools and processes they use to fight mobile fraud prevention. Add to that the higher cost of some of the authentication techniques used to fight mobile fraud (i.e., Voice Verification) and increasing mobile transactions could translate into higher OPEX this holiday season, hurting Q4 profits.
But by making sure their anti-fraud solution has the following key capabilities, retailers can make fighting mobile fraud easier and more cost-effective in the coming year.
- Know if a mobile device is being used for a transaction
- Identify what type of mobile device is being used
- Pinpoint the “real” location of the mobile device
- Determine if the device is a pre-paid device
- Know if the phone number being used is a forwarded number
- Associate other transactions with the device
- Determine if it is a card-present or a card-not-present transaction
- Ascertain if the financial information being used has been compromised.
In addition to the essential mobile anti-fraud capabilities listed above, tracking, visibility and comparative data can help retailers to understand how much (or little) time they should spend fighting mobile fraud.
At this time of year, most retailers are likely too swamped to think about improving mobile fraud prevention. But by taking action once the holiday rush is over, retailers can get started on making the most of m-commerce in 2017, and be in a prime position to capitalise on the m-commerce revolution once the holiday season rolls around again.
To find out more about the state of mobile payments and fraud, download the Mobile Payments and Fraud: 2016 Report, which includes 93 charts, detailed industry data and actionable information with which to fight fraud on mobile.
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