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Mobile Commerce Fraud Jumps 70%

mobile-fraud-pirateAs mobile becomes an increasingly popular channel for purchasing all sorts of goods and services, unfortunately mobile fraud is also rapidly rising.

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.


This fraud rate is much higher then the overall fraud rate for all merchants which was 0.68% of revenue in 2014, and well above the e-commerce rate of 0.85%

m-com-fraud

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.

m-Com-focus

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.

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02.02.2015    Tags: , ,
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