A major shift is underway in how merchants position mobile payments as a source of revenue, according to new research from fraud-prevention specialist Kount. Some 2,000 folks responded to Kount’s recently released free report “Mobile Payments & Fraud Survey: 2014 Report,” including 1,000 online merchants.
This is the second such report Kount has produced, with last year’s containing 2012 information from 400 respondents. In a recent podcast interview with PYMNTS Senior Analyst Jeffrey Green, Don Bush, Kount vice president of marketing, noted that the company this year wanted to get a perspective from two different areas: what merchants felt was going on, and how things were working on their level, and how service providers, such as card brands, acquirers, and issuers, were looking at the mobile market and how it was affecting their decisions and strategies.
(Jump to: 1:50) “We kind of melded the two together in this report, and it also gave us one other piece of data that was very valuable, and that is by verticals – by industry, by product type, by company size – and how people were implementing mobile strategies, both payments and fraud, in the industry,” he said. “We felt that was an important piece of information that wasn’t getting out, and we wanted to make sure the market could see that so they could benchmark themselves, see where the trends were going, and make some decisions based on that information.”
And now that Kount has comparative data from last year’s report, it has identified some tremendous growth and changes in attitudes toward how merchants want mobile to interact and transact with their consumers, Bush said. For example, in the first survey the mobile source of revenue for 50% or more of the companies was less than 5%. And when considering those companies now doing between 20% and 50% of revenue from mobile, the mobile channel was just less than 10% of the respondents, Bush said.
(Jump to: 3:30) “Now, fast forward for 12 months, and we see that merchants that are receiving a source of revenue through the mobile channel of 20% or more has doubled. It’s gone up to over 21%. And those that are receiving less than 5% revenue through that channel has fallen off by 25%, Bush said. “So what we’re seeing is a shift -- more people are pushing mobile, more merchants are receiving revenue through those mobile channels, and they’re starting to respond to that.”
With regard to fraud concerns, the results from the inaugural survey found that the perception was that mobile fraud was just as risky as doing eCommerce, no more, no less. Now the number of respondents saying mobile is more risky is up about 25%. And that may be because mobile is still a bit of a mystery to many, Bush said.
(Jump to: 6:50) “And as people are being forced to accept and move into that mobile channel, looking at fraud differently is necessary,” he said. “There is new ways to transact, new ways to look at fraud.”
Another thing that the survey identified was more respondents saying they need specialized tools to manage fraud. In the inaugural survey, 17% of companies said they need special tools for mobile fraud. Now, more than 36% say that’s the case, Bush said.
(Jump to: 7:47) “We knew what was happening,” he said. “We didn’t know it was going to double.”
For a free copy of the Kount report, click here.
To learn more about how the payments industry is responding to retailer data breaches and rising consumer concerns about security, listen to the full podcast by clicking below.
Don Bush, Vice President of Marketing, Kount
In his role, Don works with online retailers, industry analysts, consultants, law enforcement and trade associations to determine best practices, trends in the marketplace and the latest threats to eCommerce businesses.