Mobile and Fraudsters and Apps, Oh My!
In the classic film The Wizard of Oz, “lions and tigers and bears” struck fear (oh my!) in the hearts of Dorothy, The Tin Man and Scarecrow. The same might be said today of online retailers when it comes to mobile and fraudsters and apps (oh my!).
In the Mobile Payments & Fraud: 2017 Report, nearly 40% of merchants surveyed reported that mobile channel fraud had increased, up from 23% who said so in 2015. Further, more than 1 in 5 (21.3%) thought that mobile fraud was increasing at a faster pace than mobile sales in general, while just 8% said mobile fraud was decreasing in relation to mobile sales.
Where did these online businesses see mobile fraud risk coming from? By a more than 2 to 1 margin, merchants pointed the finger at browser-based mobile, providing the following responses when asked to “name the mobile payment system at greatest risk for fraud”:
- 59.8% browser-based
- 24.7% mobile app
- 13.7% contactless
This concern with browser-based mobile fraud might be one reason for the phenomenal growth of mobile apps. There are more than 5 million apps now offered on the Apple App Store and Google Play combined. Or it might be why 300 of the Internet Retailer “2017 Mobile 500” (a ranking of the world’s largest mobile commerce players) offer a mobile app.
Of course, the revenue opportunities that mobile apps offer can’t be overlooked either. For example, the app-centric Internet Retailer Mobile 500 saw mobile commerce sales grow 53.4% last year, an 18.6% higher rate of increase compared to 45% overall mobile sales growth.
As the “mobile-browser-or-mobile-app?” question sorts itself out, it’s hard to discern a clear trend. For example, nearly half of the merchants (47%) in the Mobile Payments & Fraud: 2017 Report said that they offered a dedicated mobile website to customers, a 24% increase over the percentage that said so in the 2015 report.
On the other hand, Starbucks, an early and strong leader in mobile commerce, just shut down their mobile and eCommerce sales on starbucks.com—which accounted for $42 million in sales in 2016—to focus efforts on their mobile app and retail business.
Regardless of what type of mobile commerce payment strategy an online business pursues, protecting against mobile fraud requires a comprehensive, enterprise-class fraud prevention platform. It’s the only way to provide multi-layered protection for all channels, devices, regions and payment types.
As you work through the payment and fraud challenges that mobile commerce presents, check out the eBook “The Download on Mobile App Fraud.” Given the tremendous growth of mobile sales, security attacks and threats have inevitably struck the mobile app industry. Download to learn about fraud threats and use cases in mobile apps, mobile checkout abandonment issues, and how to prevent mobile app fraud and increase conversions.