Merchant Innovation

Augmented Reality: Security Concerns And Barriers To Growth

Augmented reality (AR) isn’t just for Pokémon Go players (yes, they still exist) and fodder for near-future existential dread by way of Black Mirror. It’s projected to be the future of marketing and commerce.

Where the IoT proliferates, AR will follow. Or so say the pundits. How far outside of gaming and how that actually happens is a function of how mainstream the AR UI actually becomes. AR via a mobile device is a very different experience and attracts a very different user than AR and Oculus Rift headsets. That suggests that the direction of AR could head in two very different directions.

Will Devices Drive AR?

The dedicated AR device market is projected to reach just under $660 million by 2018. And the combined AR/VR markets are projected to reach over $162 billion by 2020.

Most recently, Lenovo rolled out the first ever AR smartphone using Google’s depth-sensing tech, Tango. Google also rolled out 35 accompanying apps for tango — mostly AR games as of now. AR is here, though in early stages, along with its potential applications and benefits for commerce and marketing.

But what they’re – and everyone is banking on – is an augmented reality experience that can be applied to any number of applications: virtual showcasing, increasing customer customization, interactivity, and advertising. Businesses can have AR function for pre-purchase trials and planning (think virtual fitting rooms à la Nordstrom, Adidas and Sephora, or 3-D home décor modeling like HSN rolled out in September). The current hype surrounding AR can draw in new customers to a brand that implements it, while AR’s ability to increase user participation can work toward customer retention.

Despite these numerous benefits and uses, development and adoption of AR into business models worldwide are a bit uneven. Some national and regional markets are more willing to accept AR than others. Globally, 59 percent of companies reportedly plan to develop or use AR in some capacity in the next year.

Those numbers look pretty different by region. In North America, where a majority of AR developments are expected to originate in these early years, that number is 62 percent. In Europe, only 55 percent of businesses plan to develop or use AR.

Businesses worldwide cited insufficient ROI, security concerns, lack of budget and lack of knowledge as the top barriers to adopting AR. Ninety-four percent of African businesses are concerned about AR security, for example. The global security concern figure is 87 percent.

Security is key for all AR products. Consider, for example, the case of Pokémon Go. The AR game saw 100 million downloads and $200 million in revenue in its first month. And every one of those downloads required users to give up email information, search history and even payment card credentials. And users happily did (that’s hype for you). Unsurprisingly, it wasn’t long before hackers jumped on the opportunity to get a piece of that private data motherlode.

Some cases of fraud saw hackers offer access to fake leveled-up accounts or bonuses that instead were phishing scams. Other users fell victim to email campaigns falsely promoting free Pokécoins. Pokémon Go’s creators didn’t anticipate the full scope of authentication challenges that the AR game would present — but there’s room to learn from past mistakes.

A good first step for future AR gaming platforms might be to allow users to be able to manage and delete their sensitive data after it has been shared. Anticipating cybercrime before launch and incorporating authentication safeguards is another critical move for developers.

The problem is the sheer volume of data that exists in the ever-expanding scope of the IoT. Securing it all is a massive, essential task, although nothing may ever be perfectly safe. Here’s hoping that by the time we have augmented car windshields displaying live GPS and location data, or everyone and their mother can digitally remodel their new kitchen on their smartphones, that developers will have advanced the way our private data is secured.

For the latest IoT developments, trends, and news, take a look at the Internet of Things Tracker™, sponsored by Intel.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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