Mobile Fraud Is Different

by Raymond Pucci 0

 Mobile fraud on e-commerce transactions is getting worse not better. That’s the conclusion from payment security professionals as discussed in the following article.

 

Last year’s Black Friday online sales smashed sales records, generating $3 billion with more than $1 billion of sales coming from mobile. This year, over two billion users are likely to purchase at least once using mobile devices. The shift to mobile is driven by younger consumers. The growing trend validates companies’ efforts and investments in building mobile-ready online stores. However, dangers loom as merchants are scrambling to meet the demands of the threat posed by mobile fraud.

Plenty of attention has been given to improving customer experience for mobile. Ecommerce development has been largely focused on design and performance for the past years. The often-cited Google study on mobile speed warns about the consequences of slow-loading websites. Experts have also compiled mobile user experience (UX) best practices that promise to deliver better conversions.

However, this preoccupation with performance and UX improvements may be putting other aspects of ecommerce like security and fraud prevention on the backseat. A new mobile ecommerce fraud report by fraud prevention platform Riskified reveals that merchants should start to pay attention to fraud prevention as mobile sales increase.

Behaviors that are used as flags to aid fraud prevention for desktops may not fully be applicable for the mobile experience. Ninety percent of merchants are reported to use the same fraud prevention tools across channels. This may be creating a major blind spot that could allow mobile ecommerce fraud to thrive if left unchecked.

 

Increased use of smartphones and tablets to make online purchases has created more fraud and chargeback headaches for merchants. Unfortunately, some of the anti-fraud measures put in place for desktop transactions are not as effective for mobile purchases. This is why we are seeing an increase in e-commerce fraud solutions that focus on device identification that can detect user behavior and patterns. Knowing a smartphone user’s keypad characteristics such as key pressure and even the angle in how they hold the device are emerging tools that will be quite effective in reducing mobile e-commerce fraud.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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