Marketers Need to Step Up Mobile Fraud Protection to Retain Customer Loyalty

Mobil fraud protection is important for customer retentionThere has been considerable discussion in the market recently pertaining to loyalty program fraud.

According to new data from Kount, Inc., the rate of mobile fraud is highest on Android devices. What’s more, mobile fraud outpaced that of online and in-store fraud for the first time this year.

Kount, which helps businesses boost sales by reducing fraud, analyzed more than 100 million transactions across various devices from its customer base of thousands of merchants among all retail categories from 2011 to June of 2015. The comprehensive data also shows that average transaction amounts on iOS mobile devices are greater than those made from Android devices.

While the rates of fraud on Android devices have not always exceeded that of iOS devices, this trend shifted in 2013, when Android overtook iOS. In fact, fraud rates on iOS devices have steadily decreased since Kount began tracing the data in 2011. On Android devices, fraud rates increased between 2011 and 2013, and has held steady since 2014.

In 2011, fraud on iOS devices was greater than Android devices by 45%.

In 2012, the gap closed to 9%.

In 2013, the fraud rate on Android devices was higher than on iOS by 17%, which grew to 44% in 2014 and it remains at 44% for the first six months in 2015.

“With consumers increasingly transacting on mobile and the adoption of EMV technology in the United States, we expect to see mobile fraud rates continue to increase versus online and in-store purchases,” said Don Bush, vice president of marketing at Kount. “Merchants may be implementing increased fraud protection measures for online and in-store transactions, but they’re still playing catch up when it comes to mobile fraud protection. It’s imperative that retailers–and everyone in the retail and financial sectors–understand the myriad risks with mobile transactions and take the necessary steps to put mobile-specific fraud protection in place.”

Average online and in-store transaction amounts were greater than those on mobile devices overall until the first six months of 2015 in which purchases on the iPhone ($129.94) and iPad ($164.19) began to exceed non-mobile transactions ($106.94), Kount’s new data shows.Mobil fraud protection is important for customer retention

Fraud is on-the-go, as mobile fraud between 2011 and 2015 to date has increased by a staggering 81%, the data reveals.

The fraud rate for non-mobile transactions has decreased by 50% from 2011 to 2014 and in the first six months of 2015, the fraud rate dropped another 50% from 2014, largely due to the sharp increase in mobile transactions.

“While trends demonstrate certain operating systems have higher rates of incidence, mobile fraud is not limited to any one type of phone, tablet, or transaction,” Bush explained. “Before companies can effectively stem fraud, they must first identify the origin and device type behind each mobile transaction and take the necessary steps from there. We anticipate the shift to EMV in the US this fall will lead to a decrease in-store fraud, but also expect that fraud will continue to shift to mobile channels.”

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