• by Chuck Martin , Staff Writer, February 3, 2014

For mobile payments aficionados, there’s some good news and some bad news.

Mobile payments are seriously on the rise, at least from a percentage standpoint, according to a new study.

The number of merchants accepting mobile payments increased 50% from last year, to the tune of about one in 10 (9%) now accepting some form of mobile payments.

But on the not-so-good news side, mobile merchants are losing some of their revenue to fraud, according to the True Cost of Fraud Mobile Study conducted by Javelin Strategy and Research for LexisNexis.

As might be expected, smaller merchants are less likely to protect themselves from fraud through technology solutions with some (21%) saying it costs too much, according to the study.

Small merchants also trail large retailers when it comes to mobile-channel acceptance while both are more likely to accept mobile browser and app payments over other payment types.

However, mPOS hardware is used almost exclusively by small merchants (18%) compared to those that are large (1%).

Although merchants view them as higher risk, the most common mobile acceptance is through mobile browsers (55%) compared to from apps (38%). This is consistent with what we hear from major retailers who note that most of their commerce comes via their mobile website rather than through their app.

Fraud against mobile merchants is more pervasive with credit card (58%) payments rather than debit card (23%), according to the research.

Mobile merchants also face more identity theft than merchants overall and they view identity verification as the most serious fraud-prevention issue.

While adoption of mobile payments is at fewer than 10% of merchants, the study found that a quarter (25%) of merchants expect to being accepting mobile payments this year.

While consumers see security as main deterrents to using mobile payments, it looks many like merchants may be on the same page.