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Fraud is now highest on mobile

News, 05 August 2015

BOISE, ID: Fraud on mobile devices has surpassed online and in-store fraud for the first time while more fraud is being committed on Android than iOS devices, according to new analysis.

Kount, an Idaho-based fraud detection firm, examined 100m transactions from its customer base of thousands of merchants spanning the last four years to June 2015.

The industries covered in the report included retail, telecoms, travel, multi-channel, digital goods, and others, and multiple devices were examined.

As more transactions take place on mobile, the report found that fraud is also following the trend, leading the fraud rate to increase 81% between 2011 and 2015.

Indeed, the fraud rate for non-mobile transactions dropped by 50% from 2011 to 2014 while, in the first six months of 2015, the rate fell a further 50% since the end of last year. This was largely due to a sharp increase in mobile transactions.

"With consumers increasingly transacting on mobile and the adoption of EMV technology in the United States, we expect to see mobile fraud rates increase versus online and in-store purchases," said Don Bush, vp 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," he added.

Unlike in 2011, when fraud on iOS devices was 45% greater than on Android devices, Android is now the device on which the majority of fraud occurs during mobile transactions. Fraud on these devices is now 44% higher than on iOS.

However, iOS users spend more on average than Android users, the report also found. In 2011, purchases on iPhones were $28.27 higher than on Android phones and the gap has continued to widen.

The average transaction on an iPhone in 2014 was $124.47, or almost double the amount on Android devices ($65.22). Meanwhile, average transactions on iPads increased to $164.19 last year.

Data sourced from Kount; additional content by Warc staff