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Study: Mobile payment penetration grows, but fraud is a looming threat

A new research study has found that fraudulent transactions via mobile devices result in $2.83 of fraud costs for every dollar of actual fraud losses. That figure is actually better than the $3.10 spent per dollar of fraud for the on-line channel, in part because mobile merchants are likely to sell digital goods without replacement or redistribution costs. More than 25% of the fraud costs are due to fees and interest to financial institutions.

The study was conducted by LexisNexis Risk Solutions and Javelin Strategy and Research and is available here.

Along with the fraud issue, the study also recognized the rapid growth that mobile payments are undergoing. Almost one in 10 merchants accepted mobile payments in 2013, up 50% per year since 2011. Another 25% expect to begin accepting mobile payments this year.

Other key findings:

  • Mobile browsers have the highest acceptance rate among merchants who take mobile payments: 55%. 
  • 38% of mobile merchants accept payments through mobile apps.
  • The largest growth channel is mobile point-of-sale (mPOS) hardware. No merchants reported using mPOS in 2012, but seven percent used it just one year later.
  • In mobile, credit card fraud is a bigger issue than debit card fraud — nearly three in five fraudulent transactions were associated with credit cards, but only 23% related to debit cards.


Kelly Hill
Kelly Hill
Kelly reports on network test and measurement, as well as the use of big data and analytics. She first covered the wireless industry for RCR Wireless News in 2005, focusing on carriers and mobile virtual network operators, then took a few years’ hiatus and returned to RCR Wireless News to write about heterogeneous networks and network infrastructure. Kelly is an Ohio native with a masters degree in journalism from the University of California, Berkeley, where she focused on science writing and multimedia. She has written for the San Francisco Chronicle, The Oregonian and The Canton Repository. Follow her on Twitter: @khillrcr

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