With Mobile Commerce Comes Mobile Fraud: ThreatMetrix Announces Research Around Mobile Transaction Activity
Posted May 18, 2011
As Behavior in the Mobile Channel Changes, so Will the Concept of Risk
LOS ALTOS, CA – May 19, 2011 – ThreatMetrix™, the fastest growing provider of cloud-based fraud prevention solutions that do not require personally identifiable information (PII), today announced that a joint study with the Ponemon Institute examined how comfortable consumers are with sharing their mobile location with a company. More than half of respondents said they would be willing to share this information if it meant protecting against online fraud. Of those, the majority (37%) feel most comfortable sharing their location information with banks, followed by a certified third party that monitors potential fraudsters (32%). The results are outlined in a report, “Consumers’ Reaction to Online Fraud.”
“With the rapid growth in mobile activities, brands need to consider a cohesive approach to fraud prevention across all devices and not just PCs,” said Alisdair Faulkner, chief products officer, ThreatMetrix. “Some of our social networking customers already see about 20% of activity coming from mobile transactions as opposed to web. The good news is that mobile commerce has arrived. The bad news is that fraudsters know it.”
The March 2011 ThreatMetrix Cloud-Based Fraud Prevention statistics found that mobile transactions were more likely to be fraudulent than web-based transactions. Based on a sample of more than 200 million transactions from across 1,000 sites, ThreatMetrix found that an average of 2% of worldwide transactions came from a mobile device, with the most originating in the U.S. (4%).
When mobile transactions are broken down by industry, social networks top the list (5.4%), followed by alternative payments (2.5%) and e-commerce (2.4%). “The Social Local Mobile revolution has arrived and will be a leading indicator for mobile transactions across other industries,” added Faulkner. Mobile commerce continues to grow, evidenced by both the ThreatMetrix and Ponemon study, as well as Gartner predictions that state by the end of 2013 12.5% of ecommerce transactions will be from a mobile device.
Recommendations for Mobile Fraud Prevention
“As behavior in the mobile channel changes, so will the concept of risk,” said Faulkner. “Brands need to consider last-minute purchases, and the fact that customer convenience will demand real-time response. Fraud platforms need to be in real-time, with context-specific policies to adapt to changing customer behavior. Otherwise, brands risk good customers getting bounced by outdated fraud models.”
What ThreatMetrix recommends:
• Review impact of mobile on existing device identity and behavior-based fraud filters
• Centralize fraud intelligence across all web, app and mobile transactions to improve detection rates and reduce costs
• Don’t re-invent the wheel. Even if brands have a native mobile app, consider redirecting all web and mobile transactions and authentication processes through a common web channel
• Review your brand’s mobile strategy and the use of customer and device data; while they provide rich fraud intelligence, security and privacy are potential minefields
The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries. For more information, visit www.ponemon.org.
ThreatMetrix helps companies stop web fraud and accelerate e-commerce in real-time so they can significantly reduce online fraud, acquire more customers faster, reduce costs, and increase customer satisfaction. The ThreatMetrix™ Cloud-Based Fraud Prevention Platform, incorporating ThreatMetrix™ SmartID cookieless device identification, provides online businesses with the ability to protect themselves and their customers by verifying new accounts, authorizing payments and transactions and authenticating user logins in real-time. Online businesses can deploy the ThreatMetrix Cloud-based Fraud Prevention Platform, which does not rely on personally identifiable information (PII), for traditional online activity via a personal computer as well as for mobile and tablet devices. The company serves a rapidly growing customer base around the world across a variety of industries including social networks (dating, gaming), financial services, e-commerce, affiliate marketing and payments. For more information, visit www.threatmetrix.com or call 1-650-625-1451.
© 2011 ThreatMetrix. All rights reserved. ThreatMetrix, the ThreatMetrix Cloud-Based Fraud Prevention Platform, ThreatMetrix SmartID, ThreatMetrix ExactID, and the ThreatMetrix logo are trademarks or registered trademarks of ThreatMetrix in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.