Mobile Payment Fraud More Likely for Small Businesses
Smaller merchants that accept mobile payments are particularly vulnerable to fraud because they tend to use fewer anti-fraud solutions, according to a LexisNexis/Javelin Strategy & Research study. Larger businesses typically use more prevention methods, and those that accept mobile payments block nearly eight times as many fraudulent transactions as smaller retailers do. The study also found that fraudulent mobile transactions cost merchants almost three times the cost of the actual product stolen, when additional expenses such as chargeback fees, payment-processing costs, fraud investigation, and replenishment of lost merchandise are factored in. LexisNexis/Javelin estimated that about three out of five bogus transactions were credit card-based, compared to less than a quarter that were debit card-based. The researchers recommend that mobile e-commerce retailers implement rigorous authentication of card-not-present transactions via mobile devices and integrate mobile apps with authentication to offset the threats of payment compromise and identity fraud. Another suggestion is to make identification of fraudulent mobile transactions separate from online payments to better understand the risk and mechanisms associated with the channel.
From “Mobile Payment Fraud Especially Risky for Small Business”
Business News Daily (02/06/14) Brooks, Chad