In 2014, the fraud rate for mobile purchases rose 70% from 2013, reaching a level of 1.36%. And this is despite the fact that more than half of all fraudulent attempts are blocked.

According to the study from LexisNexis, one of the contributing factors is the complexity and variety of alternate payment methods used for mobile commerce.

One of the key reasons for this higher fraud rate is the larger number of alternate payment methods supported by the mobile commerce companies. This segment accepts payment through an average of 4.5 channels, whereas the overall merchant average is only 2.6 payment channels supported.

According to LexisNexis, “While supporting multiple channels offers the greatest convenience to consumers, it also presents fraudsters with the widest variety of attack vectors. If any of these channels is not adequately protected, fraudsters’ chance of success increases.”

Despite these risks of fraud, the overall percentage of merchants who are selling through the m-Commerce channel more than doubled from 2013 to 2014, reaching a level of 15%. And overall, merchants have strong plans to increase their focus on mobile payments.

One interesting fact is that almost one quarter of mobile fraud is what is termed “friendly fraud”, which is fraud committed by a family member or close associate. The difficulty of good identity verification is cited as the key cause behind this. Dennis Becker, Vice President at LexisNexis commented, “We expect this percentage to drop, as more mCommerce merchants adopt mobile-channel specific fraud prevention tools.”

The full study has lots more information and recommendations about m-commerce fraud and security.

This year one of the best and most thoughtful lists we’ve seen comes from Golden Gekko, a leading mobile solutions provider in North America and Europe.

Their forecast identifies 10 key trends that will influence and shape the mobile industry in 2015. Our industry continues to evolve at rapid pace, and this list provides a lot of good “food for thought”.

Here are the top 10 predictions from Golden Gekko:
[note: these headlines are taken from the Golden Gekko 2015 Trends slideshare presentation. Follow the link at the bottom of this article to see the full presentation which gives fuller explanations, examples, and discusses the implications for each of these trends]

1. Get ready for Mobile Apps 3.0
The next version of mobile services will go beyond simply mobilizing existing online services. Instead, they will take a unique ‘mobile approach’ that will do more to leverage location, context, and usage behavior.

2. Smartphone as the control hub for the Internet of Things
This trend is well underway, with smartwatches, sensors, home appliances, security, smart vehicles, and more already being connected to, and controlled by, the smartphone.

3. Mobile devices will generate the majority of all web browsing and media consumption
This has been growing steadily, and in certain sectors mobile has already passed the 50% threshold (see Mobile Shopping Reaches “Tipping Point”). This will continue to increase due to new devices as well as more mobile centric sites.

4. Phablets – between smartphones and tablets
Global sales of “phablets” (devices mid-way in size between smartphones and tablets) are projected to outsell portable PC’s in 2014. People are still learning what type of devices and screen sizes they prefer, and manufacturers are working to give them every option.

5. Big data becomes integral to all mobile services
In 2015, “big data” will stop being a separate activity for companies, but will become a built-in, necessary part of all mobile services, and will be used to power the delivery of more personalized services.

6. Wearable and sensor breakthrough
2014 was predicted to be the “year of the wearable”, but actual numbers don’t support this. However, with the Apple Watch shipping in Q1 2015 and a host of other products now on the market, 2015 should be the breakthrough year for wearables.

7. Healthcare takes a big mobile leap forward, followed by even bigger privacy concerns
The potential for large revenue as well as revolutionary improvements in productivity and health care delivery will continue to drive rapid innnovation in this space. But the collection of private health data will cause major concerns for privacy and security advocates.

8. A new approach to Omni-Channel
Brands will need to rethink their approach to omni-channel, and will drive to deliver services based more on location and context, rather than by the type of device the consumer is using.

9. Mobile loyalty and payments go hand-in-hand
The most successful mobile payment applications in this past year – such as Starbucks and Uber – were not based on new technology such as NFC or Bluetooth, but they did manage to combine payments and loyalty in a way that fit well with our lives. Look for more of this in 2015, as customers demonstrate they are willing to give credit card and personal information in return for convenience and loyalty benefits.

10. App development becomes easier, and a lot more complex
Although new mobile development tools and development environments are coming on the market with the aim of making mobile development easier, the increasing breadth and intricacy of the overall mobile ecosystem means that the task of building a mobile solution continues to get more complex.

For a more detailed look at these top trends, check out the Golden Gekko slideshare presentation.

Golden Gekko has clients around the world and across a wide variety of sectors, giving them a wide base of experience on which to base their predictions. For more about Golden Gekko, visit their website.

It’s no secret that Facebook is a digital advertising behemoth. eMarketer predicts Facebook will serve over 21% of all mobile ads this year, which earns Facebook the number two spot in all digital ad sales, second only to Google.

That being said, Facebook “buy now” ads simply won’t work. Here’s why.
Industry Opinion by David Rekuc, Ripen eCommerce

For most eCommerce sites, a great ad is made up of three key components:
1. The product(s) sold in the ad appeals to its target audience.
2. The audience has the means to buy the item.
3. The ad is shown at a time when the audience is ready to buy.

Advertising on Facebook Marketplace falls short here because retailers cannot target users based on a signal of their intent to buy. In recent years, advertising has improved with Facebook Ad Exchange (FBX), where retailers can target users who have already been to their site but did not complete a purchase. Unfortunately, there is no indication that the “buy now” button will be offered through FBX.

On the other hand, Google’s ads are inherently more valuable to eCommerce sites because searching for a product indicates a consumer is ready (or almost ready) to purchase an item. Google ads pass all three of the criteria above – and they don’t require a third party ad unit to support the transaction.

Unless Facebook plans to integrate the new button into its Ad Exchange, the “buy now” feature will not reach potential customers when they are ready to shop. This means the “buy now” button will only ever be useful for impulse products, which only make up a small fraction of the eCommerce industry. Without retargeting capabilities, the efficacy of the “buy now” button will always lag behind eCommerce ads on Google and FBX.

For what it’s worth, Twitter’s plan to incorporate eCommerce advertising also fails to target consumers when they are ready to buy. However, Twitter ads are new and exciting; they don’t suffer the same negative perception as ads on Facebook. Consumers may be more willing to give them a shot and retailers more willing to wait for a reasonable ROI.

David Rekuc (@DaveRekuc) is the marketing director at Ripen eCommerce, a full-service agency that specializes in building custom solutions for online retailers. For more information, visit www.ripenecommerce.com.

While the phone has some interesting new features – such as a 3D display and automatic product recognition – the significance is much more likely to be in the impact it has on mobile commerce and mobile retail.

The fact that Amazon was designing and building their own smartphone has been one of the worst kept secrets in the industry for a long time. But now the wait is over and full details of the Amazon Fire Phone have been announced. The interesting thing is that while some features are purely technology, some are a more clever combination of technology and service offering which Amazon can provide due to its other ongoing businesses.

Here are the highlights:

Firefly:

This is one of the most interesting new features which lets users link objects they see in the real world to the online world.

Using one of the built-in cameras, the Fire Phone can automatically recognize a wide range of objects and media, for example books, DVDs, phone numbers, QR codes, CDs, games, printed email addresses, URLs, and barcodes. Once it recognizes what you are looking for, it searches its database to find that product for sale on Amazon.

And if you are not looking to buy something, but instead want information about, for example, a painting, it will connect you to the correct Wikipedia page.

Amazon says Fire Phone can recognize more than 100 million items, including 240,000 movies and TV shows, 160 live TV channels, and 70 million different products.

And to insure that Firefly is easily accessible and widely used by consumers, there is a dedicated “Firefly” button on the phone which activates the feature.

Dynamic Perspective 3D

This feature provides a better way to interact with various objects like maps and images. Just by tilting the phone, you get a different perspective on the object, which gives the impression of 3 dimensions.

For example, Bezos showed how the Empire State Building in New York would look with this new feature. Just by turning and tilting the phone he was able to see all around the building, and all the different perspectives.

User interface

Amazon has also added some new user interface features to their phone. To do this, they built 4 extra cameras into the front of the device. These cameras track the user’s head movements and then based on an internal algorithm run the interface.

For example, when looking at a rack of clothes while shopping, simply tipping the phone will move to the next item on a rack. Standard web pages can be scrolled by tilting the phone forward or back. To access menu items while in an app, tilt the phone to the left, and to access content, tip the phone to the right.

Of course it will take some time for application developers to incorporate these into their apps, but it is always good to see advancements in user interface.

Mayday customer service

For quite sometime Amazon has offered Mayday customer service, essentially 24/7 phone access to technical assistance. This feature is now incorporated into the Fire Phone through the Mayday button.

Second screen and Prime content

Second Screen is roughly the same as Apple’s Airplay feature. It will let Fire Phone users stream content from their phone directly to Amazon TVs (and some Samsung TVs), while still using the Fire Phone to access other information about the show.

In addition, Amazon is initially bundling one month free subscription to their Prime service with the Fire Phone. Prime gives access to over 30 million songs, movies, and TV shows, as well as free expedited shipping. Growing the Prime service is a long term objective of Amazon, and this is a great tie-in for the new phone.

Camera and photo storage

As with all smartphones, the Fire Phone includes a high quality camera: 13 megapixels, panorama, burst mode, etc.

What is interesting is that Amazon is also including unlimited online storage for photos. Given the massive scale of Amazon’s IT infrastructure this is a very small load for them, but it could be a great selling point for some consumers.

The downside: Apps!

The one big drawback with Amazon’s Fire Phone is that it has a more limited set of available apps. Because it uses a proprietary version of the Android OS, it will not provide access to the more than 1 million apps on the Google Play store (and of course iPhone apps won’t work with it either). And certain apps from Google (gmail, Google Drive, etc) are very unlikely to ever be ported to the Fire OS by Google.

Summary

While it is unlikely that Amazon will take a major share of the smartphone marketplace anytime soon, the Fire Phone is certainly an interesting test case. In fact it may well be a leading indicator of things to come.

• To date all smartphones have been very general purpose. However the Fire Phone seems to be fully designed with the single objective of improving the mobile shopping experience. Perhaps we have reached the point where special purpose devices will become economically and functionally desirable again.
• Amazon is clearly trying to increase the customer value of Fire Phone by linking it to other services they offer. Perhaps this will be the recipe in the future for successfully launching new targeted or proprietary devices.
• The biggest question around Fire Phone is likely to be whether or not consumers will accept the limited library of apps in return for the new features and the better shopping experience. However, Amazon’s app store currently has around 250,000 apps, perhaps this is enough and we will see that no one really needs access to over a million apps.

Amazon has shown the ability to launch a hardware product and iterate it over time, while adding new service components, in order to arrive at a product+service combination that is very compelling to consumers. I would bet that the Fire Phone will follow a similar trajectory, and over the coming few years we will see Amazon build an interesting business around it.

However, the largest impact of the Fire Phone is likely to be on the overall progress of mobile retail and mobile shopping. This industry is still very new, and many consumers are still not very comfortable with it. Anything which significantly improves the mobile shopping experience – and Fire Phone has the potential to do that – can have a large effect on the uptake of the industry.

Now a new trend has been identified – “Web-rooming”. This is the exact opposite of show-rooming, and in fact appears to be more popular.

This infographic explains the phenomenon, and suggests the best ways for retailers to take advantage of this situation.

According to AdWeek, “Showrooming describes consumers who price shop online after visiting physical stores. Webrooming refers to the process of researching products online and then visiting a store to make a purchase.”

A recent study from Merchant Warehouse, in the 18 to 36 year-old demographic, 50 percent of smartphone owners have actively show-roomed. However, a much larger percentage, 69%, have web-roomed.

This can have serious implications for retailers. For example, price matching is a growing service offered by retailers, and over 1/3 of smartphone owners report that they have requested this. In addition, easy returns and the ability to touch and try the product are other strengths that saavy retailers can capitalize on.

Brick-and-mortar retailers can capitalize on this growing trend by focusing on what motivates consumers to choose webrooming in the first place. When shoppers were asked why they would search for items online prior to making a store purchase, the responses varied. Approximately 47 percent wanted to avoid shipping costs, 23 percent didn’t want to wait for delivery of the items, and 42 percent wanted to check product availability.

Chris Wuhrer, SVP of strategic initiatives and product marketing at Merchant Warehouse, believes that more stores will take the lead of Best Buy and Sears in creating apps that will allow shoppers to price compare in stores, and then beat any prices that are better than their own. On the other hand, “some consumers are less price sensitive and they’ll pay more when they can return [merchandise locally], particularly high-priced items and apparel.”

[original source: Merchant Warehouse]

Bringing together insight from sector newcomers , entrepreneurs, and the established financial powerhouses, WIRED Money will introduce, explain and predict the changes affecting the world of banking, finance and money.

Back for the second year, WIRED Money invites financial thought leaders to investigate the future of money, banking and finance.

Thanks to the successful launch at East London’s Level 39, WIRED Money returns to the same venue on the same date – July 1, 2014 – to see how the topics discussed have evolved and what new trends are breaking through.

WIRED Money is as much about networking with some of the most exciting people in the sector as it is about seeing fascinating new concepts and companies on stage.

WIRED Money will introduce, explain and predict the changes affecting the world of banking, finance and money. The event will feature excellent networking opportunities, with senior figures from across the banking and financial sectors.

WIRED Money will cover a variety of themes, including:

Digital and alternative currencies
Crowdfunding
Regulation and government
Frictionless payments and transfers
Hackers, malware and security
Disruptors and incumbents

For more information, visit the conference website.

One company that is doing just this is Monitise, a company that began in mobile banking, but now has grown to support mobile payments and mobile commerce. And soon, Monitise intends to turn banks in a “media channel”.

Starting with Mobile banking

Monitise’s core business has been in working with banks to implement mobile banking. Mobile banking is essentially using a mobile device to access a normal bank account, and execute normal banking transactions.

The most popular of these services is usually checking an account balance, but most banks will also offer many other services such as transferring money between accounts, notifications if a charge is made to a credit card, help finding the nearest ATM or branch, etc.

Mobile banking is seen as critical to many banks as a way to appeal to a younger demographic, and also to reduce certain operating costs in the branches. The graphic shows the strong age related penetration of mobile banking in the US.

Monitise has never been a consumer brand, they are a “B2B2C” company, providing the infrastructure and services that banks launch under their own name. Over the past several years many, many banks have begun offering mobile banking services, and this has been a key driver for Monitise’s growth. Currently they work with over 350 banks, there are over 28 million customers that use their services, and something over $70 billion is transacted each year.

Although overall the uptake has been very good, according the Richard there are still a number of “vanity projects” in the market, where the mobile app was designed to look pretty, but not enough focus was given to customer functionality and marketing. So while these banks can now say that they provide mobile banking, their usage has not been great.

On the other hand, banks who have taken it seriously have seen great results. “The ones that have done it right are able to close branches, are tapping new customers, and are building much deeper relations with existing customers”, commented Richard.

In fact, certain banks have now reached a key threshold, where more transactions are happening over mobile than over the standard online banking channel. This despite the fact that internet banking has been offered for much longer and usually has a higher the penetration in the customer base. The reason is that the level of mobile interaction is so high – often 30, 40, or 50 times per month – and so the volumes are huge.

From Mobile banking to payments and commerce

As the industry developed, Monitise realized that they were in a good position to offer additional, related services to the market. So they expanded from mobile banking to supporting mobile payments, and then mobile commerce. Now their corporate slogan is “Bank Anywhere; Pay Anyone; Buy Anything”.

Looking more closely at their products, Richard explained that there are in fact 2 fundamental things that the company provides to clients.

First is a cloud-based software platform. This provides the business logic for all the various types of transactions, which include not only banking transactions, but also customer card registration, location-based offers, P2P payments, NFC payments, QR codes, client management, etc.

The second main part of the offer is the connectivity to a wide range of financial institutions and other key players in the eco-system. These might be for example card clearing networks, ACH gateways, mobile airtime top-up aggregators, cinema ticket providers, etc.

This approach allows the company to remain agnostic about the particular payment method or technology selected by a bank for a service – for example ACH vs. Visa, or QR code vs. NFC. It also means that a client can add new features relatively easily – for example adding air time top-up to a banking app can be done with minimal new development.

Their business model is primarily recurring, volume-driven license fees and revenue share. Richard points out that Monitise is not built around disintermediating companies in the financial eco-system. Rather, he says, “we are all about lubricating the existing infrastructure, securely, into the mobile world”.

Banks as a media channel

Monitise believes that the popularity of mobile banking has now reached the point where banks could in fact become effective media channels. And there are some reasons to think this might be right.

In most countries, according to Richard, mobile banking apps rate consistently among the “Top 10” most popular apps. Mobile banking customers typically use their app every day, and often up to twice a day. In addition, banks have collected a lot of data about the users.

So combining the popularity of the apps, the high level of customer engagement with the app, and the presence of lots of personalized data, it seems a reasonable conclusion that that banks could monitise this situation by acting as a media channel and including additional offers to their customers.

Richard is quick to point out that the offers would have to be very relevant to the ongoing bank activity. “You wouldn’t want to check your bank balance, then do a funds transfer, and then see an advertisement for socks,” he says. But carefully selected offers, aligned with the customers interests might do quite well, and eventually the banking app would evolve into a trusted place for commerce.

And Monitise has some research to back up this supposition. They recently published a white paper titled M-Commerce: Building the Revenue Opportunity for Banks. Data from the study showed that customers are much more confident if m-commerce is provide by their bank, as shown below.

In addition, consumers said they would be willing to make higher value purchases if they were brought by the bank. [note: to get the full study, see the download link at the bottom of this article.]

To help encourage this evolution, Richard explained that Monitise is pursuing two complimentary strategies.

First, they are helping their banking, telco, and retail partners to generate more even more eyeballs through creating high engagement applications. To this end, last year Monitise acquired mobile agency Grapple, which has now been branded Monitise Create. And earlier this year they acquired Istanbul-based Pozitron, a leading developer of mobile banking apps.

These firms are charged not only with building apps for clients, but also with developing “best practices” that lead to improved customer engagement, through innovations in design, user interface, and the overall customer journey.

The second part of the strategy relates to the commercial offers. Richard explains that, “We are actively working with our clients to help them bring relevant commercial content to their users. We believe this is a great way to help nudge the proposition along.”

The future of payments

Monitise believes that mobile payments will continue to be an area of great innovation and competitive growth. “Ten years ago, payments was usually viewed simply as an operational function of a company. Now, people are viewing payments as a real competitive weapon. These days we are seeing a full-on battle for how mobile commerce is going to develop.”

In terms of what consumers should expect, Richard believes that payments will become more ‘invisible’, and the market will need to coalesce around just a couple of mobile payment options.

“Commerce is moving to mobile at lightening speed, but it is still very fragmented. In the long term, you don’t want consumers walking into a shop thinking ‘In this store do I tap my phone? Or will my phone vibrate? Or do I scan something? Or do I need to log in to an app?’ That’s not a good situation, and things will have to become more standardized for consumers.”

The industry itself will also continue to change and grow at a rapid rate, but the opportunities are very big. “We know that disruptive companies will continue to bring out disruptive new services – the question is whether the incumbents can react quickly enough to keep their place at the table. We expect that the next major company to emerge in the internet space (i.e. like a Google or a Facebook) will be a company that finds the right way to combine payments, with some m-commerce, with CRM, with big data, plus social consumer engagement.”

]]> http://www.mobiadnews.com/?p=6479 Sun, 06 Apr 2014 16:18:29 +0000 http://www.mobiadnews.com/?p=6479 At last some concrete evidence confirming a trend that has seemed likely.

A recent study has shown that, compared with older generations, the buying habits of Millennials are significantly more influenced by their friends’ social media activities.

According to a poll conducted by Harris Interactive for the Webby Awards 68% of 18 to 34 years old social media users surveyed were at least somewhat more likely to purchase an item after seeing a friend’s post about the item.

Not surprisingly, on the opposite side of the scale were the users over 65 years old. 78% of this group answered that they were not at all likely to make a purchase based on post made by friends on their social media accounts.

Income level did not seem to have a strong correlation to the effect of social media, although those people whose household income was between $75,000 to $100,000 were more likely to be influenced by friends posts.

A somewhat more surprising result is that people in households with children said they were much more likely to be effected by social media.

Another key breakdown relates to gender.

The study found that women are much more likely to share their thoughts and feelings about a product or service. And this is consistently true for all age groups.

For example the youngest group, 18 to 34 years old, just over 50% of the women indicated they would share their thoughts at least sometimes. For men of the same age, 61% said they rarely or never would share information.

In the older groups, the percentage of “sharers” went down for both genders, but women were still more likely to share. For example, in the 55 to 64 year old group, only 30% of women would share at least sometimes, but 91% of the men said they rarely or never shared their views.

A recent study by Yesmail interactive has shown that the percentage of consumers interacting with email exclusively on mobile devices is now over half (52%), and the growth rate of mobile generated orders is triple that for desktop PC’s.

The study, which analyzed 6.4 billion e-mails sent during Q4 2013 across several different industries, also found that the number of mobile orders went up by 58%. This compares with desktop order growth of 29%, clearly showing that mobile orders are rapidly gaining in importance.

Within the mobile orders, tablets dominated. According to the study, almost 60% of the mobile orders were in fact coming from consumers using tablet devices.

“In quarters past, marketers have been embracing mobile as a variable in the consumer journey. Now, mobile should be marketers’ primary focus,” said Michael Fisher, president of Yes Lifecycle Marketing. “The increase in mobile sales indicates that consumers are not only more comfortable with mobile, but more comfortable with immediately acting on emails opened on a mobile device.”

One interesting sidelight is that “hybrid” viewing of emails is dropping rapidly. This is the scenario, for example, where an email is opened once on a mobile device, and then again later on a desktop PC. The number of hybrid email viewers dropped by almost 40% from the previous quarter, and is now very small.

Retailers and brands using Pinterest saw a 224% increase in mobile revenue in January 2014 compared to a year earlier.

We all know that mobile internet overall is growing quickly, and traffic to Pinterest’s mobile site has gone up by 73% since January 2013.

However, the data also shows that that this amazing growth in revenue from mobile comes from two main factors:

All of this data shows that Pinterest users are acting on the information they get from Pinterest and this is translating into shopping intent. They aren’t just browsing on their mobile devices, they are shopping, researching, and buying products.

As mobile use of Pinterest continues to grow (currently about 75% according to Pinterest), clearly there is a major opportunity for brands to use this channel to attract customers. The key for the brand will be to make sure that their websites are optimized not only for mobile, but also to support pinning.

About the data: This study used Google Analytics referring source data from Pinterest’s mobile website to 400+ brands. The sample included 45% apparel brands, 25% home decor brands, 20% retail brands and some other categories.