Mobile payments and m-commerce saw huge advances in 2014. The introduction of new retail technology and the seamless linking of mobile payments into new devices means there is great promise in advancing the mobile market.

However, recent coverage has shown that consumers aren’t necessarily on the same page as those in the mobile industry, because where money goes, crime and fraud seems to follow.

M-commerce technology and infrastructure is now at a point where consumers (particularly Millennials) would expect a company to have the option to complete a transaction on mobile. Unfortunately, with the development of a new channel, fraud often develops to expose any loopholes.

Mobile Ad news found that the fraud rate for mobile purchases rose 70% in 2014, and is well above the rate of e-commerce. This is due to the technicality of the segment accepting payments through more channels, which provides a wide opportunity for fraudulent attacks.

News of fraud in mobile causes a slump in consumer confidence. With news of attacks continuing to make headlines, overall trust in the channel is affected — 54% of consumers are worried about the level of security on their mobile device. Those who are 18 to 24 years old were found to have the greatest concerns:

• 62% said they would never use mobile banking compared to 53% overall.
  
  
• 60% would never make mobile payments compared to 50% overall.
  
  
• 52% would never use PayPal on their mobile devices compared to 43% overall.
  
  
• 87% cited identity theft as their biggest concern with data loss in the event their phone was lost or stolen.

This is particularly troubling for the industry, considering this age group is often associated with being early adopters. The perception is also, regrettably, matched to the reality. Mobile payments account for 14% of transactions among merchants who accept them, but they make up 21% of fraud cases (Bloomberg, source LexisNexis).

Here are three solutions that can help encourage trust in mobile commerce:

1. Develop one secure symbol to show that a payment is safe to consumers, or a single payment system similar to PayPal, which instills trust and is also technically secure.
   
   
2. Service providers and app developers should implement universal security technology to make it more difficult for fraudsters to attack via different routes.
   
   
3. Install anti-malware on smartphones as a standard to ensure users aren’t vulnerable (currently 60% of smartphone users said they had no malware protection on their devices).

In summary, m-commerce overall needs to develop security as a priority alongside the m-commerce-enabling technology so the fraud industry doesn’t overtake it by developing more advanced techniques. Then, build consumer confidence.

Without implementing these solutions, usage of mobile payment will not advance and will possibly even slow as more news hits the headlines, discouraging those with low confidence to change their habits.

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