Mobile commerce (aka mCommerce) is quickly becoming the first choice of online consumers. By the end of 2014, mobile had already surpassed desktop in terms of eCommerce transaction volume, and in 2017 over 2 billion smartphone and tablet users are expected to make at least one mobile transaction.
As mobile continues to grow, so does the pressure to provide users with a seamless, omnichannel shopping experience. To provide a frictionless experience and take advantage of the financial opportunities presented by this segment, retailers will need to adapt their CNP fraud processes.
In the course of processing millions of mobile orders for leading eCommerce merchants, Riskified has obtained important insights into how retailers can adjust fraud operations to better manage this channel. We recently compiled an in-depth report to share best practices for effectively distinguishing between fraud attempts and legitimate mobile orders, while maintaining a positive customer experience. This article offers a sample of some of these insights.
Be wary of night owls...
It’s important that merchants pay close attention to mobile consumers’ shopping patterns not only to prevent fraud, but also to ensure genuine customers aren’t being falsely declined. For example, our analysis revealed that the rate of CNP fraud in mobile orders fluctuates throughout the day. Fraud attempts peak between midnight and 6am, when the safe approval rate drops from an average of 95% to 90%. The higher fraud rate during these hours may be because fraudsters assume they can catch businesses ‘off guard’. Indeed, businesses relying on manual review are particularly vulnerable after hours and during weekends, when fraud review teams are not as readily available.
Our research also reveals that mobile shopping decreases during business hours, and increases between 6:00pm and 8:00am. With private PC ownership on the decline, legitimate customers are less likely to be near a desktop computer outside the office, which helps explain the higher rate of legitimate mobile orders between 6pm and midnight.
The holidays are GR8!
Many retailers fail to maximize holiday revenue due to tremendous order volumes. And when combined with fear of rushed decisions and concerns over incurring costly chargebacks, these can lead them to implement strict fraud prevention measures. However, with so many good customers shopping via digital channels, the rate of eCommerce fraud actually falls over the holiday season. Our figures reveal that this also holds true for mobile sales. During the last ten days of the year, retailers should be able to safely approve 98% of mobile purchases!
Indeed, Riskified’s data shows that mobile purchases peak during the lucrative North American holiday season. Specifically, the last ten days of December see a 30% increase in mobile orders. There are a number of possible explanations for the sharp rise in mCommerce transactions during these last days of the year. First, with many consumers leaving their Christmas shopping to the last minute, convenience becomes a top priority. Mobiles are always within reach, and provide shoppers with the ability to browse and purchase instantly. Second, the holiday season shopping rush often leads to longer in-store lines and customers who arrive at a bricks-and-mortar store may use their mobiles to shop online to avoid the wait.
The full report on ‘Making the Most of mCommerce’ can be downloaded here. Alternatively, you can learn more about Riskified’s eCommerce fraud protection solution by visiting our website, or contacting us directly at [email protected].
