A Forrester Research report analyzes the early successes and failures of Apple’s mobile payments system.
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"Our biggest challenge is educating customers about mobile safety just like they've been educated about online safety," says Brandon McGee, director, global mobile, at Dell Inc.
Dell includes on its m-commerce site and in its mobile apps icons with security themes such as locks and brief text notes explaining security measures. Dell also assures customers that they won't have to pay for anything they did not purchase. That's important because nearly 75% of U.S. smartphone owners are concerned about security threats to their devices, according to a survey by the National Cyber Security Alliance and mobile security technology vendor NQ Mobile.
While consumers make mobile purchases, retailers are carefully scrutinizing them using fraud prevention technologies. For instance, ThreatMetrix looks at both the device and the shopper and correlates that across the behavior of all his web transactions and across its global network of more than 10,000 sites, Faulkner says.
If ThreatMetrix detects an unknown device, it studies the way in which the consumer (or criminal) uses the device, the sites he visits and the actions he takes, looking for suspicious patterns.
Olsen says iovation charges on a per-transaction basis, starting at pennies per-transaction. He, and other vendors and retailers contacted for this story, declined to be more specific about pricing. Mott of BetterBuyDesign says some vendors charge smaller merchants 8 to 10 cents per transaction for fraud-mitigation services, and larger merchants a bit less because of higher transaction volume.
It is important to keep fraud monitoring of web and mobile transactions closely tied together, fraud experts and retailers say.
"If you have tight integration across the board you have a far better picture of a customer," says McCarter of Edwin Watts Golf. With consumers using a variety of devices to shop online, tying together the fraud-monitoring process prevents potential hiccups. "If systems are separate and a customer hits a high fraud score on a smartphone and we flagged the transaction, we would be annoying that good customer who we should know based on their history on all their devices."
Device identification along with logging which devices use the same account tie together a customer's behavior across devices, giving retailers a better idea of who exactly is making a purchase regardless of the device.
While criminals have begun devoting more energy to committing fraud in mobile commerce, anti-fraud technology vendors offer retailers tools to stop fraudulent mobile transactions. Anti-fraud technology may simply be part of the cost of doing business today, but it's an investment that can protect retailers in the new mobile arena.