Running an online business in 2016 will mean a steady increase in the number of customers accessing and making purchases on your website. As technology evolves, fraudsters follow suit, adapting their methods to exploit new payment methods and technologies.
You optimized your website and online shopping cart for mobile; your fraud detection and mitigation system should be mobile-ready too.
As merchants, payment processors, and banks work overtime to keep up with complex new payment systems, the number of fraud transactions completed on mobile devices has spiked. Even with mobile transactions making up a small fraction of total purchases, the fraud ratio among these transactions is unusually high.
Regardless of the fraud risk involved, merchants are optimizing their sites for mobile to suit their customers’ unique needs. With smartphones nearly ubiquitous and the popularity of tablets and wearable tech devices on the rise, merchants are being pushed into the mobile space—whether they’re ready or not.
The Rising Cost of Mobile Fraud
According to LexisNexis, mobile fraud is currently the most expensive type of fraud per transaction. Unlike other types of fraud, the cost is rising. Today, the cost to the merchant for a fraud transaction of any kind is more than triple the amount of the transaction.
Just like an online transaction is different than a brick-and-mortar purchase, mobile transactions are different from both of these “old” methods.
Detecting mobile fraud transactions requires analysis of different criteria than the types of fraud merchants are used to dealing with. Understanding the unique risks associated with mobile fraud is crucial, and will only become more important as the percentage of transactions done on mobile rises.
Identifying which transactions come from mobile devices is critical, as using tools like geo-tracking and other qualifiers to help detect fraud when it happens, and be proactive about mitigating it.
IT security experts, Gartner, predict that by 2018, half of all consumers will be using mobile devices and wearables to make purchases.
Safely navigating the new mobile fraud landscape means having solutions in place that treat mobile fraud as the unique problem it is. Simply put, you can’t fight tomorrow’s frauds schemes with yesterday’s tools.
Accepting mobile payments is a huge opportunity for increased revenue. But to prevent chargebacks, costly fines and fees, and problems securing payment processing, it’s critical that merchants have a fraud solution in place that’s up-to-date with the latest payment methods. Mobile payments will only gain momentum in 2016. Merchants who are not ready to face the challenge head-on will find themselves left behind, or dealing with the negative consequences of fraud. Contact us today to learn more, and ask any questions you might have had.