Retailers are more worried about the security of mobile transactions than they were a year ago, says a report from fraud-prevention firm Kount. The data breaches at big retailers like Target and Neiman Marcus likely account for the shift.

Never mind that it was the store computer networks that provided the entry point for criminals who stole payment card and personal information about tens of millions of consumers from Target Corp. and The Neiman Marcus Group Inc. The data breaches disclosed in recent months appear to have spooked retailers about the security of mobile commerce, suggests an annual study by Kount, a firm that specializes in helping online and catalog retailers minimize fraud losses.

“Perhaps due to negative publicity around recent network security breaches at major retailers, there is much more focus on security and fraud this year,” write the authors of the “Mobile Payments & Fraud Survey: 2014 Report.”

That shows up in several results of the survey of nearly 2,000 payments or fraud professionals from retailers, financial institutions, card associations and companies that facilitate electronic payments. 56.7% of the respondents were retailers.

Among all respondents this year, 50.8% said the mobile channel is riskier than e-commerce on the conventional Internet—with 18.7% saying it’s far riskier and 32.1% somewhat riskier. Last year, 42.1% said mobile commerce was riskier, with 18.6%—almost identical to this year—calling it far riskier, but a significantly smaller percentage than this year, 23.5%, calling it somewhat riskier.

That growing fear also shows up in what merchant respondents say about the fraud tools they need to monitor mobile transaction. The percentage of merchants who say the standard e-commerce fraud-fighting tools they use are sufficient for mobile commerce fell to 25.5% this year from 37% last year, while the retailers who think they need specialized tools to control mobile fraud went up from 17% to 32%.


The report also documented the growth in sales from consumers using smartphones and tablets. While only 10% of merchants last year said more than 20% of their business comes from the mobile channel, that jumped to 21% this year.

Other findings from the survey show:

  • More than three-fourths of merchant respondents with annual sales over $50 million support mobile commerce and only 7% have no plans to do so. Among retailers with annual sales under $5 million, 45% actively support mobile today and another 38% plan to add it in 2014.
  • Credit cards will be the primary way mobile shoppers pay, say 60.4% of respondents. Next comes PayPal at 15.1% and debit cards at 13.2%
  • Half of merchants say they can detect if a transaction is coming from a mobile device, but only 15.8% say they can distinguish the type of device. Last year, only 44.8% of merchants could detect a mobile device.