Mobile commerce continues to push retail sales, both in stores and out, but it is also costing retailers. A new study from TeleSign estimates m:commerce fraud is costing about $240 million in losses each year for enterprises; much of the loss is due to data theft and breaches in security.
“An uptick in online fraud resulting from today’s environment of large-scale data breaches and security incidents is something TeleSign is seeing first-hand,” said Steve Jillings, CEO of TeleSign. “Illicit activities including spamming, phishing attempts, affiliate fraud and e-commerce fraud all have a common primary motivation: money. With the shift to mobile e-commerce well underway, we know that hackers and fraud are never far behind. The report has businesses expecting a 47 percent growth rate in mobile revenues over the next few years. We believe this represents a green field for fraud incidents if security postures remain the same.”
Some interesting findings from the report include:
•Half of those surveyed believe m:commerce will increase at least 11% over the next three years
•On average enterprises lose $92.3 million per year
•Enterprises report between 25% and 49% of fraud incidents are mobile
“Mobile security has huge payback, likely returning 10-20 times or more of the investment,” said Jack E. Gold, founder and principal analyst at J.Gold Associates. “On the flipside, companies who fail to make the required investment in enhanced mobile security will not only have sharply reduced revenues, but their operation costs will be much higher. A major finding from this report is that in the next 2-3 years, next generation authentication technologies like biometrics, soft tokens and other two factor authentication will largely replace the user name and password as the primary method of authentication.”
Some experts place the mobile fraud blame on businesses, saying about 1 in 4 don’t require mobile logins. However, they also note that over the next three years more businesses are expected to go to two factor authentication which should help to cull fraud numbers.