Report: 25% of Merchants Plan to Accept Mobile Payments This Year
Feb. 6, 2014
Less than 10 percent of merchants accepted mobile payments in 2013, but around a quarter expect to have the capability by the end of this year, according to a new report from antifraud technology provider LexisNexis. The report is a deeper look at data that was collected in September for LexisNexis’ True Cost of Fraud Study.
Despite security concerns on the part of consumers not familiar or comfortable yet with mobile payments, LexisNexis found mobile penetration in the retail channel is growing quickly. Of the merchants that accept mobile payments, the most common method is via a mobile-optimized Website (55 percent) or app (38 percent). But, while interest in offering customers mobile payments is growing, especially among smaller merchants, the same care is not being taken with security, according to Aaron Press, director of market planning, e-commerce and payments at LexisNexis.
“Smaller merchants are looking to mobile as a growth channel, but typically they are not as well protected,” said Press. “They are not making the investments in mobile fraud protection and that puts them at risk.”
Interestingly, merchants don’t necessarily need to be performing a ton of mobile transactions to open themselves up to more fraud. The simple act of enabling mobile transactions introduces enough complexity into a merchant’s system that it produces vulnerabilities, according to Jim Van Dyke, CEO of Javelin Strategy & Research, which performed the research for LexisNexis.
“Those merchants that accept mobile payments in the most advanced configuration have had a higher fraud rate for the last two years,” said Van Dyke. “What we’re not seeing is the mobile transactions themselves is where the fraud is occurring.”