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Are Mobile Transactions Riskier Than Standard eCommerce?

posted on: Tue Jul 11 2017

A surprising finding from the recently-published Mobile Payments & Fraud: 2017 Report is that a growing number of online businesses perceive mobile transactions to be less risky than standard web eCommerce.Mobile Shopping Cart

In fact, only about 25% of merchants said mCommerce fraud risks were higher than for eCommerce. Two years ago, more than 43% felt this way.

And while it’s true that most merchants in the Mobile Payments & Fraud: 2017 Report thought mobile fraud was increasing:

  • Only about 1 in 5 merchants thought it was increasing disproportionately faster than mobile revenue
  • More than 35% thought it was increasing proportionately with mobile revenue or even decreasing
  • The largest percentage of merchants—42.1%—simply didn’t know either way

Yet, even as merchant concerns about mobile fraud appear to be lessening (or at least uncertain), industry data indicates that fraud in the mobile channel is actually a growing problem:

  • The Fraud Practice puts the fraud rate for mobile commerce at 2X the rate for conventional eCommerce
  • LexisNexis estimates the “true cost” of mobile fraud to be $2.33 for every $1 in fraudulent transactions
  • RCA estimates that 60% of fraudulent transactions originate from a mobile device
  • Account takeover—a huge component in mobile app fraud—increased 61% last year and generated $2.3 billion in losses, according to a March 2017 blog post from pymnts.com

This phenomenon—uncertain, conflicting attitudes about fraud risk—is not uncommon whenever new payment types or channels become increasingly mainstream. Part of the reason may be due to the fact that online businesses with more exposure to mobile commerce often have different viewpoints compared to merchants who are newer to the experience.

For example, online businesses in the Gaming, Digital Goods, and Telecom market segments—who arguably have had longer experience with mobile commerce—are more likely to think it’s riskier:

Far Riskier       Somewhat Riskier     Total     Market Segment     
14.3% 35.7% 50.0% Gaming
13.3% 20.0% 33.3% Digital Goods
10.0% 20.0% 30.0% Telecom
7.5% 17.6% 25.1% Overall Average


What is clear is that mobile commerce is becoming increasingly important to more online businesses:

  • This year, 1 in 3 merchants reported they got at least 30% of their revenue from the mobile channel, compared to 1 in 20 merchants in the inaugural 2013 report who said they got at least 30% of their revenue from the mobile channel
  • This year, 62% of online businesses said the mobile channel was “Very Important” to revenue growth, compared to 34.6% of online businesses in the inaugural 2013 report who said the mobile channel was “Very Important” to revenue growth 

If you want to know more about the fast-growing mobile channel, download our latest eBook “The Download on Mobile App Fraud”. The fastest-growing trend in the fast-growing mobile channel? Mobile apps. Are your fraud prevention systems ready for the new challenges presented by this leading-edge technology?

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