ABI: If Data Breach Worries Don’t Kill M-Commerce, Speed Very Well Might

Written by Fred J. Aun
March 11th, 2009

Although it’s one of the fastest growing segments—which is easy to do when your initial marketshare is practically zilch—M-Commerce is facing some significant hurdles before it can achieve widespread acceptance, with data breach fears and insufficient speed near the top, according to a new report from ABI Research.

Surveys show the public’s lack of enthusiasm for mobile device-based shopping held steady between late 2007 and late 2008. “Consistent from year to year, a little over one-half of all respondents are not interested in using their mobile phones to make purchases,” ABI Senior Analyst Jeff Orr said. “Transaction security was cited by 71 percent of mobile phone users as a major concern preventing wider uptake.”

However, even if retailers, mobile carriers and payment processors somehow manage to convince mobile users that their personal information is in good hands, M-Commerce will not suddenly skyrocket, the report said. There will still be consumer frustration over speed.

“As consumers become more comfortable with transaction security by establishing trust with transaction vendors, more emphasis will be placed on the speed of the transaction,” Orr predicted.

Someday, perhaps, consumers will have no problem buying big-ticket items with their mobile phones. When that day arrives, the purveyors of pricey goods should give a nod to the products that opened the door: lowly micro-purchases of games and ringtones. More than half the people who participated in the ABI Research surveys said they bought at least one ringtone, “suggesting that low-value transactions are less threatening to consumers.” The respondents also expressed “some willingness” to have their mobile purchases added to their wireless phone bills.

Despite the widespread use of text messages, ABI Research found that consumers continue to hold disdain for text marketing messages. The only softness found by the researchers in this area was that some of those surveyed “indicated that they were open to inducements such as free content aimed at converting a message to a sale.”

The growing popularity of smartphones, with their larger screens, full-fledged Web-browsing capabilities and sleek interfaces is expected to help M-Commerce gain ground. “As smartphone penetration increases, more merchants will introduce mobile shopping, spurring growth,” said ABI Research Senior Analyst Mark Beccue. “Smart merchants will focus on the advantages of mobile, such as impulse shopping and real-time auctions.”

Beccue’s prediction parallels those made in December by the Mercator Advisory Group, which forecast that smartphone-based remote mobile payments will reach $389 million in 2009, $1.7 billion in 2011 and $8.6 billion in 2014.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.