According to a study entitled ‘True Cost of Fraud(SM) Mobile Study’ released by LexisNexis, a global provider of content and technology services, fraud threats are impacting merchants to the tune of USD 283 for every USD 100 of actual fraud losses through the mobile channel as retailers increasingly look to mobile as a way to generate revenue.
The study revealed that mobile penetration in the retail merchant channel is rapidly growing. 25 % of merchants expect to begin accepting mobile payments in 2014. The mobile browser and mobile applications represent the dominant acceptance channels with 55 % and 38 % of mobile merchants accepting these channels, respectively. However, the largest growth channel is mPOS (mobile point-of-sale) hardware. 7 % of merchants used mPOS in 2013 after no merchants reported using it in 2012.
Also, the study revealed that 39 % of small merchants are attracted to the mobile channel, but their fraud levels are high because they are less aware of fraud detection schemes.
Fraud against mobile merchants is more pervasive in credit card fraud than debit card fraud. Nearly three in five fraudulent transactions were credit card based, while only 23 % were attributable to debit cards.
Finally, the study highlighted that merchants should track fraudulent activities by each channel they offer. Currently, only 48 % of mobile merchants reported that they track fraud by payment channel.
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