The 6 keys of m-commerce fraud in retail sector

In recent years electronic commerce via mobile phone has increased at an accelerated pace, and trends indicate that it will continue to grow by 2015.But this increase in m-commerce, especially in the retail sector, has also brought a greater vulnerability to fraud, as shown in a recent study of LexisNexis. In this article we summarize the six keys.

1.Why the retail sector commitment to m-commerce?
Companies that have opted to introduce this channel in its business strategy based their decision on customer convenience (85%) and audience expectations by having different types of shopping channels (61%).
Thus, 23% of companies believe in the importance of integrating the m-commerce strategy, and 48% see it as an added value to compete in its sector. 36% want to invest in order to increase efficiency and savings.

2. How will introduce the retail companies this channel in your strategy?
Investments to enter the m-commerce strategy will focus on three areas: 38% increase visibility of this channel through its stores and websites; 26% will train its employees in the process and techniques; and 20% increase your marketing efforts towards the canal.

3.What problems may involve m-commerce channel?
Keep in mind that in 2014, from 15% of companies who had a channel, the transactions received only accounted the 14% of total volume, and furthermore 21% of fraud was attributed to these transactions.
These data are reflected in the opinion of the companies that have implemented the m-commerce, of which 61% feel insecure channel.
Despite having a smaller number of transactions compared to other channels, fraud total exceeds 20% other. Definitely, there is much research to improve the security of the channel.

4.Which are the most common frauds?
The most common types of fraud through this channel are basically two: the now famous identity theft (32%) and the request for return or refund (30%).
Only these two categories account the 62% of fraud in m-commerce, so recommendations are directed to focus efforts on reducing these two types.

5.What costs represent fraud by m-commerce?
Every dollar lost to fraud involves a cost of $ 3.34. Compared to the costs entailed the frauds in other channels, this is not enough, because the average unit value of sales is low. In this sense, the strategy of multichannel business gives them an advantage to retails.

6.What can we do to prevent fraud in m-commerce?
The report gives us three basic recommendations:

  • Undertake a specific monitoring of mobile fraud, separate from other channels, to conduct a detailed assessment and well design the most appropriate solution.

  • Establish, setting the concrete operational, good communication with the bank, to perform a dual monitor transactions that take place.

  • Find and leverage existing solutions to prevent online fraud. It's funny because 15% of m-commerce highlight the lack of solutions, but few apply existing.

In summary, given the m-commerce is a key to the retail sector it would be unwise to give strategic channel, reducing fraud losses is to improve the control and security of online transactions.

Source: 2014 LexisNexis® True Cost of FraudmCommerce