June 5, 2018
It’s no surprise that fraud continues to grow in the card-not-present (CNP) economy. The big surprise is the complacency that still hangs like a dark cloud when it comes to detecting, deterring and reducing fraud in the mobile channel.
With a variety of tactics and techniques to choose from, fraudsters look to exploit shifts in marketplaces and weaknesses in a merchant’s policies and procedures. There are few greater opportunities for fraud—in nearly any industry—than within the mobile sales channel. Mobile’s rapid growth has given rise to various types of CNP fraud that capitalize on the fact that merchants are unwilling to provide the necessary support to adequately protect customers and revenue in the mobile channel.
Merchants of all sizes have rushed to embrace mobile to extend their reach, maintain a constant awareness within their customer base and support a frictionless customer experience.
This has placed a significant burden on risk and fraud teams to balance protecting the merchant account while catering to the individual consumer experience. If the decision policies are weak, the merchant is exposed to increased fraudulent activity, excessive chargebacks and manual reviews. Policies that are too strict chase away customers and revenue. Merchants want the confidence to approve, decline or require additional insight for every transaction, in real-time, with a very high degree of accuracy. This confidence is gained by data gathered about every transaction.
The soon to be released 2018 Mobile Payments and Fraud Report by Kount surveyed nearly 600 merchants and clearly identified areas lacking adequate measures addressing mobile fraud. Some highlights of the survey include:
- For the third consecutive year, merchants are showing signs of complacency and regression in terms of capabilities and the level of importance they place on the mobile channel and managing mobile fraud risk. This has continued even though mobile channel fraud has continued to increase over the same three-year time frame.
- Approximately 35 percent of merchants still do not track mobile fraud or do not know whether mobile fraud attempts increased or decreased from last year.
- The share of merchants who say that the mobile channel requires specialized tools for risk management is at the lowest recorded level in all six years of this study.
- Only half of merchants believe the mobile channel requires additional or specialized tools, compared to between two-thirds and three-quarters of merchants in each of the past studies.
Because fraudsters look to steal as much as they can, it is imperative that merchants of all sizes and industries consider and support mobile websites and applications as they would legacy eCommerce sites. Best practices show that running both traditional eCommerce and mobile payments through an enterprise-level fraud solution can match policies across the board and reduce fraud across the organization.
For the complete findings of the 2018 Mobile Payments & Fraud Report please join Kount at its upcoming webinar on June 13 and check Kount’s website to download the report in its entirety after June 11.