Mobile Payments and Commerce Primer

By Coby Montoya January 29, 2016

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There has never been more enthusiasm around mobile commerce than there is today. The word “mobile” is used to describe very different technologies and capabilities and it can sometimes be difficult to understand how mobile plays a role in commerce today.

Web based mobile commerce is completing a transaction through a mobile device over a traditional web session. Most websites today have mobile optimized versions. The website detects you are on a mobile device by looking at characteristics of your device such as screen resolution and browser information.

Native application based commerce entails transacting through an application installed on a device. It can be advantageous for a retailer to steer consumers to their mobile application because it allows additional capabilities such as marketing through alerts and notifications. A user may be more responsive to unique notifications pushed to them on their device than traditional promotional emails. From a fraud management perspective, there is an opportunity to collect data directly from the device that is not available in traditional internet web sessions.

Recently there has been enthusiasm around Near Field Communication (NFC) technology as a way to facilitate payments in store using mobile wallets.

In addition to NFC facilitated payments, some mobile wallet support in-app payments which go through the retailer’s native application as described earlier.

As the payment industry continues to add new controls and policies to reduce traditional card fraud, it is possible that fraudsters will look to new channels such as mobile to commit fraud. It is important for retailers to understand the different implications of mobile. Here are a few simple tips in protecting yourself:

  1. Ensure reporting and metrics properly identify mobile transactions. Understanding fraud and chargeback rates by channels and payment types allows you to view threats on a more granular level. By drilling down, retailers are better positioned in creating a more targeted strategy in combating fraud which can minimize disruptions to good customers in different and unrelated channels.
  2. Make sure your mobile optimized webstore is collecting the data needed for risk and still going through the fraud process. I have seen times where a retailer partnered with a vendor to build and host their mobile commerce site. With each transaction the customer’s IP address was over written with the vendor’s IP address. Since many times mobile commerce sites require less information from the customer in an effort to speed up the check out, it is even more important to collect the right data during the transaction.
  3. Understand mobile payment chargeback liability. Since many of the recent mobile payment products are integrated with the major card networks, there are fraud liability implications. In some cases, a merchant may be under the impression they are not held liable for a specific payment type, only later to find out that the context of the payment (recurring billing for example) changes that liability. For this reason it is important to stay up to date with the chargeback liability policies and how they differ for mobile payments.

About the Author

Coby is a Product Manager at Accertify focused on enhancing Accertify's fraud platform and reporting offering. When he’s not at work thinking of ways to help merchants combat fraud, he’s at home being bossed around by two tiny humans forcing him to play My Little Pony and Monster Trucks while fetching them Strawberry Kiwi Capri-Suns and Cheez-Its.