How to reap rewards of m-commerce growth

A clutch of recent news stories makes all too clear the opportunities and the challenges of the mobile payments revolution.

First up, research from Barclays Corporate forecasts that m-commerce in the UK will increase from £1.3bn in 2011 to £19.3bn in 2021, or from 0.5% of total retail sales to nearly 5%. That is a huge opportunity, and as m-commerce extends to broad usage across more retail sectors, it represents a huge potential shift in Britain’s payment habits.

This makes the message of National Identity Fraud Week (October 17–23) all the more important. This initiative – backed, among others, by London’s Metropolitan Police, the Home Office and the National Fraud Office – aims to raise awareness of the dangers of identity theft, how to prevent it and what victims should do.

And only last week other research showed that only 17% of Brits want to use their mobile phones as wallets, with security concerns the chief reason for their reticence.

Part of the solution is certainly public education, but given fraudsters’ determination and increasing sophistication, that will not stop the more complex frauds. In fact, public awareness of the risks will likely act as a disincentive for many to adopt mobile payments.

Merchants have a big role to play here. There is a cost of moving to m-payments, and inevitably a certain industry inertia, but there must be a great opportunity for a major retailer to take the lead here.

The other part of the solution is for companies to make it harder for the fraudsters to use the identity data that they steal. As I’ve argued before, protection of corporate and consumer data is a very difficult task indeed – however, when the fraudsters do get their hands on it, the technology already exists to prevent them from taking advantage of it. And if the banking and retail sectors want to benefit from that buoyant growth in m-commerce forecast by Barclays Corporate, they will need to adopt it.