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US merchants expect mobile sales surge, but aren’t prepared for the fraud it may bring study suggests

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A third of businesses, regardless of size, believe that 20% of their revenues will come from mobile by 2014, with smaller merchants expecting more growth in the mobile channel and are as likely to have an app as businesses with turnovers of $50million of above.

So finds the latest study in the US by fraud prevention companies Kount and the Fraud Practice, which goes on to suggest that the retail segments expecting the greatest growth are jewellery, digital goods and gaming.

And key to making this happen, agree the majority if the 400 retailers surveyed in the US, is making it easy and secure for consumers to transact through mobile. But this raises issues with security and fraud, the survey – perhaps unsurprisingly – suggests.

“While retailers are focused on the growth of mobile transactions, the survey results indicate many are unprepared for the fraud that will inevitably follow,” offers Don Bush, vice president of Marketing at Kount, one of the sponsors of the survey. “To fully capture the potential of mobile, retailers need an all-in-one fraud solution that not only minimizes risk but opens up new opportunities for growth. Retailers with comprehensive fraud protection can confidently evolve their business into new channels and meet their customers wherever they are.”

According to the study, presently 55% of merchants cannot detect whether a transaction originates from a mobile device. While more than half of merchants cannot detect transactions initiated from mobile devices, nearly 60% believe it’s “important” or “very important” to have this capability.

Merchant size impacts which tools it uses currently and which tools it plans to add in the coming year, as 20% of merchants with annual revenues between $10 and $25 million consider managing fraud risk the biggest obstacle while less than 2% of the largest merchants surveyed (many of which have a solution in place) consider this a problem.

“Clearly we’re still in the early phases of a mobile revolution, but this survey reinforces that every retailer believes in the potential and growth of this payment channel,” says Steven Casco, founder and publisher of, the only publication focused entirely on card-not-present payments. “While the approach and adoption level may vary by a retailer’s size and industry, the Mobile Fraud Survey is a great barometer of what’s to come and how retailers need to prepare to operate in a rapidly changing card-not-present environment.

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