Report: Complexity Driving Mobile Fraud to New Heights
Jan. 29, 2015
Mobile-commerce merchants lost 1.34 percent of their revenue to fraud in 2014, up from .8 percent in 2013 and compared to .68 percent for all merchants, according to a new study from LexisNexis Risk Solutions. And, according to the company’s proprietary multiplier, every $100 of fraud from mobile payments costs m-commerce merchants $334, up from $283 in 2013.
The company’s True Cost of Fraud Mobile Study said m-commerce merchants accept more payment channels on average than merchants overall and the added complexity makes for a rich hunting ground for fraudsters. While the number of m-commerce transactions is still relatively low overall, accounting for 14 percent of all online transactions, 21 percent of all fraudulent transactions “are attributed” to the mobile channel. And, with mobile only beginning to tap its growth as an online payment channel, fraud will nearly certainly increase.
“Mobile commerce is going to be more widely adopted by merchants because customers are clamoring for the convenience,” said Dennis Becker, vice president of Corporate Markets for LexisNexis Risk Solutions. “To reduce customer friction and sell more through the mobile channel, now is the time for m-commerce retailers to put in place fraud prevention tools to counter the disproportionate amount of fraud that is currently occurring.”