Mobile payments and mobile channel fraud - report highlights

In surveying nearly 600 merchants, the 2018 Mobile Payments & Fraud Survey found several major mobile wallets have lost traction, with the percentage of respondents accepting Apple Pay in 2018 down from 48% to 35%, the most drastic decline of all mobile wallets, and Google Pay down from 38% to 25%.

Merchants have reported an increased awareness of mobile fraud risks, however about 35% of merchants still do not track mobile fraud or do not know whether mobile fraud attempts increased or decreased from 2017. The share of merchants who say the mobile channel requires specialized tools for risk management is at the lowest recorded level in all six years of this study. Only half of surveyed merchants believe the mobile channel requires additional or specialized tools, compared to between two-thirds and three-quarters of merchants in each of the past studies.

Support is up across the board for NFC (up from 29-37%) and other mobile payments at the physical point-of-sale, while 26% of merchants plan to increase or add support for social commerce this year, and merchants’ support for mobile wallets climbed from 22 to 29%. However, this increase in choice and support comes at the detriment to specific mobile wallets:

Most notably, merchant support for Apple Pay has gone down from 48% to 35%; Google Pay (previously Android Pay), is down from 38% to 25%. Support for PayPal increased from 48% 64% while 10% accept AliPay and 10% accept other e-wallets.

About 42% report a mobile checkout abandonment rate of less than 20%; 25% say their abandonment rate is more than 40%; 11% say their abandonment rate is at least 60 per cent.

About half of merchants (49%) stated that traditional ecommerce, consumers shopping from desktop browsers, is still their highest risk channel. Mobile web browser transactions are the next most likely to be considered the highest fraud risk, as indicated by about 21% of merchants, followed by 18% of merchants who say mobile app payments are the highest risk.

The majority of merchants surveyed (52%) indicated using third party tools or service providers to manage risk and detect fraud in the mobile channel, while one-third do not use third party services, either managing mobile channel fraud entirely in-house or not managing it at all.

The ability to detect transactions coming from mobile devices has grown considerably since the inaugural Mobile Payments and Fraud Survey, from just 16% of merchants who could detect and differentiate between types of mobile device in 2013 to 46% of merchants with this capability today.

The majority of merchants (83%) are using two or more fraud prevention tools or techniques in the mobile channel, while two-thirds are employing three or more, and 25% are utilizing seven or more tools or services. One-in-three merchants use identity authentication in the mobile channel, while about one-in-four are currently using velocity checks, device identification, and a rules engine.