As a growing share of card-not-present transactions originate from mobile devices, the fraud prevention tactics used by banks and merchants to curtail fraud on their websites must be adapted for mobile, according to a new report from antifraud technology provider Riskified.
In its Making the Most of M-Commerce – A Special Report on Managing Fraud in Mobile, the Tel Aviv, Israel-based company began with some good news—mobile transactions are safer than desktop transactions. An analysis of transactions running through its solution indicates 95 percent of mobile orders are safe compared to 90 percent of desktop orders. Merchants that treat them the same, however, could be declining more orders than necessary due to suspected fraud.
Also, the company found, all mobile orders are not created equal. The rate of fraud attempts on mobile orders for digital goods is four times as high as that for physical goods. Orders for gift cards, for example, are more likely to be fraudulent if they originate on a mobile device than on a desktop because more of those mobile orders are for digital gift cards as opposed to plastic cards.
Other interesting findings detailed in the report include how the habits of millennials affect mobile orders, the inadequacy of AVS as a fraud prevention measure for mobile orders, what international markets generate the most mobile orders (and which to be wary of) and more.
“With more than 60 percent of global online retail sales predicted to be made via mobile devices by 2019, cyber criminals will likely devise new methodologies and tools to fool fraud detection systems,” the authors wrote in the report. “Meanwhile the expectations of tech savvy users will continue to grow, as will pressure to provide customers with omnichannel options. To maintain a competitive edge, retailers must adapt their processes and systems to effectively manage fraud in mobile transactions.”
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