Pain in the Apps?
With the widespread growth of mobile network coverage and proliferation of mobile devices, mCommerce overtook browser-based desktop online shopping in 2016, in terms of both traffic and budget categories. In the USA alone, Cisco projects nearly one billion mobile-connected devices by 2020.
This revelation comes from a whitepaper on The Past and Future of Shopping Apps, which analyzes data provided by Appfigures and Clickky. The whitepaper assesses the shopping app category for App Store and Google Play. It identifies over 115,000 shopping apps currently active and available from App Store, Google Play and Amazon, both free and fee-based.
China tops the list with over 32,000 available apps followed closely by the US, UK, Canada and Germany. And 87% of shopping apps in Google Play are now launched worldwide.
As you might expect, top mCommerce apps vary by country. For example, apps from Amazon, Walmart and eBay are most popular in the US. In China, it’s no surprise that a number of apps by Alibaba lead the pack.
With the explosion of mobile apps, are merchants seeing more fraudulent transactions originating from them? Or are browser-based mobile payment systems more likely to be fraudulent?
In the recently released Mobile Payments & Fraud: 2017 Report, nearly 40% of merchants surveyed reported that mobile channel fraud has increased, up from 23% in 2015 and 2016.
And by a more than 2 to 1 margin, merchants thought browser-based mobile payments were at greatest risk for fraud.
These findings are buttressed by research from RSA that indicates about 60 percent of fraudulent transactions originate from a mobile device. But what’s interesting (frightening?) is that RSA found fraudsters have started to build apps that pretend to be legitimate, but are really imposter apps, built for the express purpose of stealing account credentials!
Maybe that’s why the Mobile Payments & Fraud: 2017 Report revealed that large online merchants (more than $500 million annual revenue) were most likely to say that mobile commerce requires additional tools for managing fraud. After all, it is these larger merchants that would likely be targets of imposter apps.
In addition, larger eCommerce operations were 50% more likely than smaller merchants (under $5 million annual revenue) to agree that “Yes, mobile requires very specialized fraud tools.” Further, larger online businesses were also much more likely to agree that being able to detect mobile devices is “Very Important” than merchants with revenue under $5 million.
This perception of mobile fraud risk—and the effort to fight it—varies not just by revenue, but by vertical market segment, too. For example, the ability to detect mobile devices was not evenly distributed across merchant product segments. Sellers of Travel Services, Event Tickets or Financial Services were much more likely to be able to detect mobile devices (and thus fight mobile fraud) than those offering Jewelry, Professional Services and Alcohol/Tobacco.
It’s obvious that fraud protection for mCommerce is turbulent and evolving rapidly. The question for all fraud prevention professionals is how to prepare for the new challenges mCommerce presents.
Download the eBook: "The Download on Mobile App Fraud" 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.