Putting the Pieces in Place: LifeLock and Lemon Wallet

At first glance, LifeLock’s $42.6 million acquisition of Lemon may not seem to fit quite right.  To some it may appear that LifeLock is buying access to Lemon Wallet’s user base, but an app with 3.6 million downloads does not justify that kind of investment on its own.  As for LifeLock getting into the mobile payments game, the last thing the market needs is another also-ran.   Fortunately, all is not as it seems because LifeLock may have actually found a way to avoid the rampant customer turnover which has been plaguing the identity protection industry.

Obviously, LifeLock gets a mobile app through which they can deliver their identity protection services.  This is a present-day necessity given consumer expectations for always on, instant access, but there is a second, more substantial benefit which LifeLock obtains from the wallet’s key financial feature.  Users can upload payment card details into the wallet, so that they (and LifeLock) can subsequently monitor these accounts directly through the app.

So how do these features create the kind of value that keeps customers coming back month after month?

When it comes to identity fraud, the name of the game is money, pure and simple.  Criminals commit fraud to get paid, and in order to do so they often misuse the financial accounts of unknowing victims.  Unfortunately, the identity protection industry’s foray into monitoring for financial fraud has taken a number of years and has suffered its share of setback.  LifeLock’s settlement with Experian over fraud alerts on credit reports took the collective wind out of the industry’s sails.  Slowly but surely LifeLock has been working its way back, though the purchase of ID Analytics and a partnership with Early Warning.  They have since managed to create a respectable financial account monitoring capability spanning everything from DDA accounts to payday loans, but comprehensive payment card monitoring was the missing piece of the puzzle.

That piece of the puzzle was the big one.  The keystone piece you notice when you open the box and can figure out exactly where it goes.

By being able to quickly detect and alert their customers of the majority of financial fraud types, LifeLock should be able to better protect their customers than they could in the past while also strengthening the relationship with their customers.  A significant portion of consumers who cancel identity protection subscriptions do so because they don’t see the value in it.  Providing conspicuous and robust financial fraud protection is exactly what is needed to create that perceived value and keep customers around for the long term.

LifeLock and Lemon Wallet?  They fit.

Category: Dynamic Payments, Mobile, Security, Risk & Fraud

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3 Responses

  1. I disagree. Yes, the thing that people see is mostly money, but just looking at money underestimates the impact of identity theft. I was talking to someone new a couple of days ago and I was told I have no money, so good luck.

    However, you can obtain credit cards, use it against the other person criminally, and let alone use it for a hospital visit. And now, guess what? Yes, you could seriously die for receiving the wrong blood type as someone recently used your identity.


  2. Al Pascual says:

    Devon,
    The vast majority of identity fraud cases are driven by financial gain on the part of criminals, and financial accounts are a prime target and/or tool. This doesn’t mean that the only damage to victims comes from draining existing accounts, as they may not be able to secure new loans, could face troubling collections activity, and may even find themselves in court. For years, the identity protection industry was behind the curve on preventing and detecting financial identity fraud cases, but they are making serious strides.

    That being said, while the misuse of personal information to commit medical identity fraud is on the decline (that doesn’t count cases where the consumer may have given someone they know access to their insurance), there is still a need for the ID protection industry to get involved. To your point, the consequences of medical identity fraud could be far more severe than the typical financial crime. Unfortunately, between the distributed nature of the medical industry and HIPAA, what providers can do is severely limited. Thankfully, there are at least a couple of providers out there who can assist with post-fraud resolution.

    Until consumers have greater control over their identities, there will be a place for ID protection services. In the interim, there are certainly opportunities for them to improve.

    Thanks for the comment,

    Al

  3. Great blog!! Thanks for sharing wonderful and informative information with us. Keep it up

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