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Half of merchants not tracking mobile app orders for fraud despite surge in mobile use, data shows

Social media and more is going to play a key role in 'new' retail

Nearly half (48%) or merchants are not tracking consumer purchases on mobile apps for fraud, despite Covid-19 driving a huge increase in mobile app purchases, research by fraud detection and payment acceptance specialist Ravelin finds.

Covid-19 drove a 36% increase in mobile app downloads and a 54% increase in purchases in apps during the second quarter of 2020 alone from consumers, and yet the proportion of merchants tracking mobile orders (48%) lags far behind those tracking website orders (68%) and call centre orders (60%).

Organisations that rely on mobile for their primary revenue drivers, like taxi firms and online product or service delivery firms tend to fare better — but only slightly. The rate of mobile fraud tracking stands at 61% for taxi firms and 62% for product or service delivery organisations.

These are the findings from Ravelin’s Online Merchant Perspectives, Fraud & Payments Survey 2020 report, which draws on the opinions and experiences of 1,000 fraud and payments professionals around the world, providing a valuable in-depth understanding into merchant fraud teams, their environment, top business threats, fraud activity trends and forecasts.

The figures are worrying considering that account takeover fraud is also on the rise. In Ravelin’s research, half of merchants report a rise in account takeover, with nearly a third of retail merchants saying it’s now the top fraud threat facing their business.

Mairtin O’Riada, co-founder and CIO at Ravelin says: “Account takeover coupled with a lack of fraud tracking on mobile devices means a huge number of fraudsters are currently getting away with denting merchants’ profit margins at a time when Covid-19 has already ravaged business confidence.

“I realise that Covid-19 has forced consumers online and onto apps faster than anybody could’ve prepared for, but fraudsters are hiding in plain sight on mobile devices. For any merchant that conducts a significant volume and proportion of business through an app, I’d advise you to look at ways to protect your sales through that particular channel.”

In terms of current levels of fraud tracking across channels, a varying proportion of merchants are measuring a varying number of payment data points. 67% are tracking the payment method type and 56% are tracking the issuer country, while 42% are tracking the use of loyalty scheme points and 31% are tracking BIN ranges.

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