According to a recent study, eCommerce merchants in the US have experienced a 140 percent increase in fraud attacks relative to 2020, while every dollar associated with missed fraud costs organizations $3.60 on average, up 15 percent from before the pandemic.
Merchants are less likely to dispute chargebacks on transactions originating from mobile wallets and significantly less likely to win those they choose to represent. Consumers may be more prone to commit friendly fraud with mobile wallet transactions and the dishonest ones may already be exploiting this trend.
Mobile and eCommerce shopping hit new highs this holiday season as Cyber Monday yet again beat its own record as the largest online shopping day in the U.S. with over $9.4 billion in eCommerce retail sales. This followed a record day for Black Friday which reached $7.4 billion in online sales while U.S. eCommerce volume on each day grew by nearly 20 percent year-over-year. One channel’s gain is another’s loss, however, as total holiday sales had a much more modest 3.4 percent growth. Department stores saw total holiday retail sales fall nearly two percent, despite growth of 7 percent in online sales. The biggest winner was mobile holiday sales, which increased 55 percent on CyberMonday year-over-year.
Unable to catch up to Apple, Samsung or Google Play, Chase Pay was used by less than 10 percent of Chase cardholders in the last 90 days, and the mobile app will be discontinued in early 2020.
Chase Pay launched in November 2016 and although being discontinued most of its features have been adopted elsewhere. While the mobile app is being shut down, the ability to login with Chase to pay on an eCommerce website displaying the Chase Pay logo will remain. Other Chase Pay features are available in Chase’s online banking app.
Although Apple Pay is the most popular cross-merchant mobile wallet with more users than Google Pay and Samsung Pay combined, the Starbucks app was used for by nearly 1 million more US consumers for mobile payments in 2017, according to data from eMarketer.
This data is extrapolated from surveys of US consumers age 14 and older who have had made at least one proximity mobile payment in the prior six months. eMarketer estimates that 20.7 million US mobile proximity payment users made payment with the Starbucks mobile app, compared to 19.9 million who used Apple Pay, 9.3 million Google Pay and 8.4 million Samsung Pay users.
Hyundai recently announced they are developing a mobile wallet while also partnering with a restaurant and two major gas stations for accepting payments made from a car’s touchscreen, or what is known as an infotainment system. This approach is similar to Ford, who offers a mobile app with wallet for storing payment cards, while Chevy has partnered with Shell who holds the payment credentials within their own app.
The new Apple iPhone and operating system are set to launch in September and include new features likely to grow adoption of Apple Pay and contactless mobile payments at the physical point-of-sale. Apple Pay is set to rollout in several more countries by year’s end while the newest operating system (iOS 11) will support Apple Pay Cash Card, a stored value account for sending and receiving person-to-person payments as well as making online and contactless payments via Apple Pay.
Apple Pay Cash adds significant new payment options and features for Apple users. First, it supports person-to-person payments directly within iMessage, which has the potential to immediately grab market share from other P2P money transfer services like Venmo/PayPal, Square Cash and Facebook Messenger. Second, the Apple Pay Cash Card, which is a stored value account that essentially serves as a digital prepaid card, has the potential to spur many more consumers using Apple Pay for mobile contactless payments, particularly among underbanked and youth consumer demographics.
Fitbit recently unveiled their first smartwatch, called Fitbit Ionic, which will support NFC contactless payments with their mobile wallet called Fitbit Pay. Fitbit Pay will be compatible with Visa, MasterCard and American Express cards issued by partner banks and is expected to launch with the Fitbit Ionic smartwatch in October.
Fitbit Pay will work with American Express as well as MasterCard and Visa cards issued by participating banks, which include major card issuers Bank of America, US Bank, Capital One, HSBC and more.
Financial Fraud Action (FFA) UK, a financial services industry research and reporting group, recently released their 2016 year-end payment card and banking fraud totals which showed an increase in card fraud overall, primarily led by card not present channel fraud. Changing trends include an increase in fraud attempts but targeting lower order amounts compared to last year, a shift from malware targeting banks to fraudsters directly targeting consumers and consumer account credentials, and mobile banking app fraud losses more than doubling from 2015.
The Financial Fraud Action UK organization is composed of major banks, payment acquirers and card issuers in the United Kingdom, and members report payment card, remote banking and check fraud losses each year. Over the years FFA UK has tracked significant increases in total payment card fraud against UK-issued cards, growing from £341 million in 2011 to £618 million in 2016. This marked a nearly 10 percent increase just from 2015, when the total fraud loss on UK-issued payment cards was £567 million.
Although mobile eCommerce sales accounted for $1.2 billion on each Black Friday and Cyber Monday, consumers shopping in-store were much less likely to pull out their smartphones. According to one payment processor, just 0.6 percent of brick-and-mortar retail transactions in the U.S. on Black Friday were made with a mobile wallet.
According to data from payment processor Cayan, over 90 percent of in-store retail transactions on Black Friday were made with a credit card, while just 0.6 percent used a mobile wallet or mobile payment app. California was the state were consumers were most likely to use a mobile wallet app, which represented 1 percent of brick-and-mortar retail transactions the day after Thanksgiving.