Merchants have gone a long way in adopting mobile payment security measures, but a large portion still does not know whether a payment originated inside the U.S. or abroad. According to a new survey from Kount, around 28 percent of merchants cannot identify international mobile payments.
Fewer people understand the risk compared to last year
The survey has shown that some of the merchants are becoming complacent about the risks involved in payment processing for mobile payments, despite an increase in mobile payment adoption. Only around eight percent of merchants in the U.S. actually understand that the mobile payment channel is riskier than other e-commerce payments, a drop from 14 percent in 2016. Merchants are trusting in mobile wallets being secured by the provider and a belief that fraud will go down as more people adopt the use of mobile wallets worldwide.
Origin identification is not as good as it should be
Identifying the origins of a mobile transaction has improved in the last five years – previously, more than 55 percent of merchants were unable to identify the mobile device origin of a transaction. According to the survey, almost one-third of merchants are still unable to identify if a mobile transaction originated abroad. Don Bush, vice president of marketing for Kount, said that merchants have shown a lot of progress in their commitment to fraud detection technology, but that progress still needs to improve more. Bush went on to state that card-not-present fraud is expected top grow further with the rise in online commerce and mobile payments, and complacency from merchants will only help fraud to increase further. He stated that they needed to “research specific tools, like comprehensive fraud platforms, that can best protect their business without any negative impact on the customer experience.”
Merchant opinions were looked at in the survey
This is the first time that this annual survey has looked at the merchant’s opinion of the various payment systems and platforms that are available, and that are associated with fraud risk. Findings revealed that around 60 percent of merchants surveyed believe that the greatest risk of mobile fraud comes from payments t hat are “browser-based”. And while 25 percent of the surveyed merchants think that mobile e-commerce is riskier than web-based e-commerce, almost 40 percent admitted to seeing an increase in fraud in their mobile channels.
Data compiled on merchant data breaches
Also included in the report on the survey was an examination into where businesses stand when faced with data breaches. Over 68 percent of those surveyed who had suffered a data breach said they had not made any changes to their systems to prevent further data breaches in the future. This was despite a majority believing that customer perception was the most damaging aspect of the breaches for their business. “With the majority of merchants reporting no changes to their fraud prevention practices after a breach, they are leaving themselves open for recurring (and many times preventable) fraud attacks,” Bush admitted. According to the survey data, only 15 percent were concerned about the fact that fraud is normally the result of a data breach.
Despite the huge influx of new options in mobile wallets, many merchants still believe that the mass adoption by consumers of mobile wallets is still around 2-5 years away. This has given rise to a slow adoption of mobile payment solutions in many businesses.
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