Gartner: Exploit location-based data to be "competitive"

22nd Sep 2010

Brands that are keen to remain competitive in the growing mobile commerce space into the future will need to exploit location or profile-based information in order to both acquire and retain customers and enable fraud detection.

According to Gartner, by the end of 2013, 12.5% of all ecommerce transactions will be undertaken from mobile devices and context-aware data based on location or personal user profiles will be used to validate 90% of them.

William Clark, a research vice president at the firm, said: "Enterprises that want to remain competitive in electronic commerce over the next five years should begin exploring context-aware applications by year-end 2011 for both fraud detection and later on for customer acquisition and retention activities afforded by personalised and customised marketing and advertising information."

Such contextual information would also provide mobile users with a better and more secure experience, he added.

But the fraud detection tools that were available today for traditional ‘fixed line’ environments such as PCs either "don’t work well or at all" in the mobile world and were unlikely to emerge as "technically mature systems that work easily and transparently across disparate mobile networks" until at least 2012, Clark said.

Nonetheless, Avivah Litan, vice president and distinguished analyst at Gartner, said that employing such tools would be an imperative in future "given the explosive growth of smartphones and other mobile devices, the increase in mobile commerce and the migration of fraud attacks to these devices".

He added that 70% of the largest 20 global card issues, which authorise more than 50% of all payment card transactions, would also gradually adopt contextual information to help detect fraud undertaken by users of ‘fixed-line’ devices. As a result, by the end of 2015, more than 15% of all payment card transactions would be validated using personal profile data.

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