ATLANTA – As retailers increasingly look to mobile as a way to generate revenue, fraud threats are impacting merchants to the tune of $283 for every $100 of actual fraud losses through the mobile channel, according to the LexisNexis® True Cost of Fraud℠ Mobile Study released today. Conducted by LexisNexis and Javelin Strategy & Research, the study highlights key fraud issues effecting mobile retailers, while also articulating ways to combat retail fraud. For more information download the study.
The findings in the study show mobile penetration in the retail merchant channel is rapidly growing. Nearly one in 10 merchants accepted mobile payments in 2013 – an increase of 50 percent per year since 2011. 25 percent expect to begin accepting mobile payments in 2014. The mobile browser and mobile applications represent the dominant acceptance channels with 55 percent and 38 percent of mobile merchants accepting these channels, respectively. However, the largest growth channel is mPOS (mobile point-of-sale) hardware. Seven percent of merchants used mPOS in 2013 after no merchants reported using it in 2012. Another key segment that is growing according to the study is small merchants. 39 percent of them are attracted to the mobile channel, but their fraud levels are high because they are less aware of fraud detection schemes.
"Mobile payment options and point-of-sale hardware are providing more business opportunities for small merchants," said Dennis Becker, Vice President, Corporate Markets and Identity Management Solutions, LexisNexis. "Despite the surge in retailers using mobile payments to conduct business, we've found in our study the unfortunate correlation between the size of the business and the impact of mobile fraud on their business."
Smaller mobile merchants typically rely on fewer fraud technology solutions, meaning they are often more exposed and fraudulent actions against that retailer can have far greater impact on their revenue.
The study also highlighted:
The study also highlighted recommendations to help combat fraud:
About LexisNexis Risk Solutions
LexisNexis Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information and analytics for professional and business customers across industries. For more information, please visit www.risk.lexisnexis.com and www.relx.com.