Author: Ralph Tkatchuk / Source: Entrepreneur
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.
The blind spot
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.
Spotting shady behavior
In the report, Riskified identified certain behaviors unique to mobile fraud.
Mobile ecommerce is generally found to carry less risk compared to desktops since the majority of big ticket item transactions, such as buying pricier consumer electronics and booking travel, are still done on desktops. Merchants can safely approve 95 percent of purchases versus 90 percent for desktop transactions.
The risk comes in with mobile orders for digital goods. The numbers reveal that fraud attempts in mobile are four times higher for digital goods compared to physical goods. The fraud rate for mobile purchases of gift cards is almost double compared to orders made on desktops.
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