Merchants are losing an average of $334 for every $100 of fraudulently made purchases on their sites.
According to the results of the recent True Cost of Fraudsm Mobile study, which is held annually by the Reed Elsevier from LexisNexis Risk Solutions, mobile commerce is facing a very expensive problem through fraud.
Merchants have been increasing to m-commerce on a steady basis and fraudsters are seeing this as an opportunity.
According to the study results, revenue from mobile commerce that is lost as a result of fraud has increased by 70 percent, last year. It rose to 1.36 percent in 2014 after having been 0.80 percent in 2013. Comparatively, among all merchants, 2014 saw an increase that brought the total lost revenue from fraud to 0.68 percent, after having been 0.51 percent in 2013.
There are a number of different avenues for fraud in m-commerce, due to the complexity of the broader range of payment channels, such as online payments programs and digital wallet apps. This in combination with added access channels such as native apps, shopping comparison apps, and mobile websites can considerably increase the risk of fraud.
The research has revealed that the average number of payment channels offered by mobile commerce merchants is 4.5.
This is notably greater than the average number of payment types accepted by online or in-store merchants, which is 2.6. This higher number of acceptable types of payments has placed those companies at a notably higher level of fraud exposure.
Twenty one percent of all fraudulent charges that were recorded were linked to mobile commerce. This is upsetting as the number of transactions that are actually occurring over smartphones continues to be a small percentage of the total sales for merchants. Last year, 14 percent of all of online transactions occurred over mobile channels.
According to the LexisNexis Risk Solutions vice president of corporate markets, Dennis Becker, “Mobile commerce is going to be more widely adopted by merchants because customers are clamoring for the convenience. To reduce customer friction and sell more through the mobile channel, now is the time for mCommerce retailers to put in place fraud prevention tools to counter the disproportionate amount of fraud that is currently occurring.”