recent study from LexisNexis indicates that half of all merchants surveyed believe that adopting mobile payments is necessary to stay competitive and 15% of those currently support mobile commerce transactions. Considering that over 75% of smartphone and tablet owners use their devices for shopping activities there seems to be a growing disconnect between customer shopping behaviours and the payment capabilities offered by retailers.

We covered some of the risks and challenges involved in mobile payments here.

Even though merchants are aware of the benefits of adopting a frictionless mobile commerce and mobile payment strategy, many are hesitant due to overly cumbersome and costly security schemes – putting them at a competitive disadvantage.

For merchants looking to implementing a mobile payment strategy, key areas to consider include:


Most of the security risks targeting the mobile channel are primarily associated with using mobile apps for transactions, mobile point of sale (mPoS) security and storing sensitive data. The study found that mobile fraudulent transactions result in nearly three times the cost of the actual product stolen. That means that for every $1 worth of product that is stolen, the merchant experiences additional costs for things like chargeback fees, payment-processing expenses, fraud investigation and restocking of lost merchandise. The use of mobile payments in small businesses demonstrates the need for heightened security, as they are typically burdened with a higher cost per fraudulent transaction than larger businesses.

Accepting mobile payments can be a daunting new aspect of the business operations, and with convenience typically favoured over security in mobile payment apps, merchants are faced with implementing a fraud prevention strategy alongside the new mobile offerings to ensure that transactions are safe and gain consumer confidence.


Mobile fraud poses a costly risk to businesses who aren’t using secure systems for mobile commerce, which needs to be fully secured in order to deliver a profitable business model for retail service providers. In 2014, for every dollar of direct loss from fraud, the total cost was $3.34. That’s up 18 percent in the past year, compared with a 15 percent drop in the the costs of e-commerce fraud, to a cost of $2.62 per dollar of fraud. That’s due in part to improved fraud-fighting techniques for conventional e-commerce, but it’s also because more physical goods are being purchased via mobile — in the past, a higher percentage of purchases were for digital goods.

Implementing a mobile payment strategy that favours security without compromising convenience will allow businesses to safeguard against the cost of fraud while positively impacting operational savings and revenues.

With mobile commerce set to accelerate exponentially, now is the best time to invest in mobile fraud detection and prevention technologies that help carry the business forward. Ideally a fraud detection system that creates a unique, secure, and trusted relationship between consumers, merchants, and issuers/payment processors/ acquirers.

Learn more about Zighra’s adaptive mobile authentication and fraud detection platform for card not present and card near present mobile commerce.

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