Kount’s Mobile Fraud Survey Finds PayPal and Apple
Among Top Mobile Wallets Adopted by Merchants
Idaho – June 29, 2017 – Kount Inc. today announced findings from the fifth annual 2017 Mobile
Payments & Fraud Survey to understand
and measure the state of mobile payments and mobile channel fraud. The report
found that while merchants have made a lot of progress when it comes to mobile
security, they have a long way to go in order to minimize fraud risk, with 28
percent of merchants still not able to identify whether a mobile transaction
came from abroad.
Despite consistent gains in mobile adoption, merchants are showing that
they are becoming more complacent about managing risk in the mobile channel.
Only a small fraction of merchants
(8%) today believe that the mobile
channel is far riskier than traditional ecommerce, surprisingly down from 14
percent last year. Merchants also remain fairly trusting of mobile wallets,
with more merchants believing that fraud will decrease rather than increase as
consumers more widely adopt mobile wallets (37% vs. 29%, respectively).
While strides have been made in identifying the device origin of a
mobile transaction – five years ago, more than 55 percent of merchants were not
able to detect whether a transaction came from a mobile device but only 14
percent of merchants report this inability today – nearly one-third (28%) of
merchants are still unable to tell whether a mobile transaction originated
“This survey has shown that merchants have made a lot of progress over
the years when it comes to their commitment to mobile payments and fraud
detection technologies,” said Don Bush, VP Marketing, Kount. “However,
card-not-present fraud rates will continue to grow alongside rising online and
mobile commerce so it’s important that merchants not become complacent in their
security efforts, but rather research specific tools, like comprehensive fraud
platforms, that can best protect their business without any negative impact to
the customer experience.”
the first time, the survey examined merchant opinions regarding the payment systems and
platforms associated with mobile risk, finding that 60 percent believe ‘browser-based’
mobile payments are those at the greatest risk of fraud. Although only 25
percent of merchants today say that the ‘mobile channel’ is higher risk than ‘web
e-commerce,’ nearly 40 percent of merchants indicated that they have seen an
increase in mobile channel fraud.
About one-in-four (25%) merchants state that mobile
app-based payments are at the greatest risk for fraud
14 percent say that mobile contactless payments
face the highest risk of fraud
Breach Deja Vu
report also examines where most organizations stand on data breaches and public
sentiment, finding that the majority of merchants (68.4%) have not made changes
to their fraud prevention following a data breach, even though more respondents
said consumer perception was the most damaging aspect of a breach.
According to Bush, “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.”
Merchants rated the following as the most damaging aspects of a data
Consumers’ perception of weak security (44%)
Loss of personal data (20.4%)
The fact that fraud results from a breach (15.6%)
Loss of financial data (13.2%)
Since the inaugural Mobile Payments and Fraud Survey was conducted in
2013, merchants have nearly doubled their mobile payments options online and
in-person: the percentage of merchants who support a mobile app for online
shopping has more than doubled (from 21% in 2013 to 44% in 2017); the
acceptance of mobile payments at the point-of-sale nearly doubled (from 15% to
29%); and mobile apps supporting in-store shopping experiences nearly tripled
(from 5% to 13%). Merchants have also improved their device detection
abilities: five years ago, more than 55% of merchants were not able to detect
whether a transaction came from a mobile device, but now only 14 percent of
merchants are unable to determine the device on which a transaction was made.
It’s a Mobile World and We’re (Not) Just Paying in It
Regardless of the influx of new mobile wallet options, merchants have
been slow to adopt the payment method (with only 22% of merchants accepting
mobile wallets) – perhaps because the majority of merchants (70%) anticipate
consumer mass adoption of these mobile wallets is still two to five years away.
Those that do accept in-store mobile wallets prefer PayPal (48%), Apple
Pay (48%), and Android Pay (38%), respectively.
Merchants accept 3.4 different mobile payment
methods, on average:
of merchants support three or more mobile payment methods
merchants support four or more mobile payment methods
merchants accept at least five mobile payment methods
Top mobile-only payment methods accepted from mobile
Wallet (including Apple Pay): 22%
More merchants identify ‘safety’ with Apple (61%)
than other brands:
No brand: 30.1%
In A Merchant’s Toolbox
The fraud prevention tools, techniques and services the greatest number
of merchants are using today to prevent fraud in the mobile channel are:
Card security codes or checking the CVV (58 %)
Fraud Scoring (48%)
Device ID (38%)
Velocity Checks (35%)
Complete Fraud Platform (47%)
ID Authentication 15% (a sharp decline from being
used by 32% of merchants in 2015)
“Only 30 percent of merchants overall are concerned
with finding antifraud solutions that prevent fraud in the mobile channel,” said Steven Casco, CEO
of CardNotPresent.com and
the CNP Expo. “At the same time, almost half of merchants say that consumers
perceiving weak security would be the most damaging aspect of suffering a data
breach – if consumers demand complete fraud platforms, merchants may just feel
more compelled to deliver it.”
To download a free copy of the 2017 Mobile Payments &
Fraud Survey, click here.
Kount helps businesses boost sales by reducing fraud. Our all-in-one, SaaS
platform simplifies fraud detection and helps online businesses accept more
orders. Kount’s turnkey fraud platform is easy-to-implement and easy-to-use.
Kount’s proprietary technology reviews billions of data points and provides
maximum protection for some of the world’s best-known brands. Merchants
using Kount can accept more orders from more people in more places than ever
before. For more information about Kount, please visit www.kount.com.
Mobile Payments and Fraud Survey: 2017 Report is the fifth edition of this
annual study, in association with CardNotPresent.com,
Braintree, a PayPal company, and The Fraud Practice. The report seeks to
understand and measure the state of mobile payments and mobile channel fraud.
Now with five years of data, this study is able to identify persistent findings
and changing trends around many aspects of mobile channel payments and risk.
The survey was conducted online from April 2017 to June 2017 with more than
800 merchants from 29 vertical industries and ranging from under $5 million to
more than $500 million in revenue.