Report: Mobile Transactions and Mobile Fraud Increasing in Tandem
Aug. 6, 2015
In what may be the clearest indication that mobile commerce is supplanting traditional desktop e-commerce and even eating away at the lead enjoyed by brick-and-mortar commerce, a new report shows fraud rates on online transactions originating from mobile devices are surging compared to non-mobile transactions. Antifraud technology provider Kount looked at more than 100 million transactions that crossed its network between 2011 and 2015 and found mobile fraud increased by 81 percent during that time. According to Kount’s Don Bush, the explanation is simple: more m-commerce transactions along with the ongoing shift to EMV in the U.S. is resulting in fraudsters attacking the mobile channel.
“With consumers increasingly transacting on mobile and the adoption of EMV technology in the United States, we expect to see mobile fraud rates continue to increase versus online and in-store purchases,” said Bush. “Merchants may be implementing increased fraud protection measures for online and in-store transactions, but they’re still playing catch up when it comes to mobile fraud protection.”
Kount’s research found the combined fraud rate for traditional e-commerce and in-store transactions was halved between 2011 and 2014. And, in the first six months of 2015, the fraud rate dropped another 50 percent, which the Boise, Idaho-based company attributes mostly to the sharp increase in mobile transactions.
The company also looked at fraud rates by operating system and found, despite a widening gap in average transaction value between iOS and Android ($124.47 for iPhones vs. $65.22 for Android phones in 2015), fraud rates on iOS devices this year are 44 percent lower than on Android devices. Bush said the evolving nature of fraud dictates that merchants need to have a more complete picture of where online transactions are coming from.