Is mCommerce Fraud Increasing?
Mobile commerce is on a tear. Over the next decade, it’s projected that purchases on mobile devices and apps will overtake those from browsers and personal computers.Consider this: Black Friday generated over $3 billion in online sales last year and $1.2 billion of that total came from mobile users. And this year, over two billion people will make some form of mCommerce transaction. That’s nearly one out of every three people on earth, based on the World Population Clock.
In fact, mobile users account for about 19% of all US retail Internet sales today. This figure is projected to reach 27% by the end of 2018. By then, mCommerce will represent 1 out of 4 dollars spent online!
The tidal wave of mCommerce can be attributed to the collision of two forces. First, the number of mobile users is soaring. Second, online businesses are racing to offer mobile options in order to outpace rivals and remain competitive. These two dynamics fuel each other in an accelerating feedback loop.
Unfortunately, along with the growth in mobile purchases comes the heightened risk of fraud.
- 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
- RSA research 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
In other words, online merchants who have not secured their mobile transactions could be hit with a surge of chargebacks, fees and other losses.
The Mobile Payments & Fraud: 2017 Report shows merchant awareness of these trends is growing. Two years ago, 23% of polled merchants felt mCommerce fraud was increasing. Today, 39% say it’s true.
Curiously, fewer merchants are concerned with the specialized concerns inherent in managing mCommerce fraud. For example, 15% of merchants surveyed stated that mobile fraud is less risky than eCommerce, up from 4.7% in 2015.
A couple of notable exceptions are the Automobiles/Auto Parts and Gaming segments of the online economy, where responding merchants indicated they feel mobile transactions to be riskier than conventional eCommerce. Similarly, the Food/Drug and Flowers/Gifts categories were also notably high at over 40%.
According to "Mobile Commerce Statistics and Trends" by tech blogger Ayat Skukairy at invesp, mCommerce shoppers “tend to spend twice as much via digital channels than those not buying on mobile devices.” This is telling, and so is her indication that 42% of smartphone or tablet users will do even more shopping on their mobile devices this year.
Thinking globally, noted blogger Peter Rojas from Gizmodo portends: “the majority of internet usage will be done via a mobile device and for most people the mobile web will be their primary, if not their only, way of experiencing the internet.”
Download the Mobile Payments & Fraud: 2017 Report to get insights into the latest trends, continuing patterns, and changing behaviors related to mobile commerce.