Fraud Attacks, Losses and True Cost of Fraud All Increased in 2021

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.

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JP Morgan to Discontinue Chase Pay for Mobile Contactless Payments

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.

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Reports Show Merchants Struggle to Balance Fraud Prevention and Sales Conversion

Card Not Present channel Merchants cite order rejection rates of nearly 3 percent for domestic transactions and nearly 7 percent for international orders. Meanwhile more than half of merchants depend on AVS and CVV checks, considering them to be effective fraud tools. While most merchants measure fraud rates and order rejection rates, far fewer take the next step to understand false positives.

According to the Merchant Risk Council (MRC) 2017 Global Fraud Survey, eCommerce merchants declined 2.6 percent of all orders for suspected fraud, and 3.1 percent of orders over $100. CyberSource found higher order rejection rates in their 2017 Fraud Benchmark Study: 2.9 percent for domestic orders and 6.8 percent for international ones. While merchants are declining 3 percent of more of their orders, not all of these are actually fraud attempts.

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Fitbit Pay Joins an Already Crowded Mobile Payments Arena

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.

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Consumers Were Much More Likely to Shop with Mobile Devices Online Rather than In-Store This Black Friday

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.

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Apple Pay Adoption Moved Slow, but 2015 a Big Year for Mobile Payments Overall

Apple CEO Tim Cook may not have had the year he was hoping for after saying that 2015 would be the year of Apple Pay, but it was a strong year for mobile contactless payments overall marked by increases in adoption and mobile payment volume, several more players entering the arena and multiple partnerships, acquisitions and commercial developments to foster the future of mobile payments. While it’s estimated that only 16.6 percent of U.S. consumers with a compatible iPhone have tried Apple Pay and this payment method is used in just 5.1 percent of transactions where it is supported by both parties, it was a catalyst for mobile contactless payments which doubled in volume for 2015 and are expected to triple in 2016.

According to eMarketer there were over 23 million proximity mobile payment users in 2015 that spent $8.71 billion, more than doubling from $3.7 billion spent via contactless POS mobile payment methods in 2014.

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Mobile Driving More Sales So Far this Holiday Season

Consumers made more than $2 billion worth of purchases in the mobile eCommerce channel between Thanksgiving, Black Friday and Cyber Monday. Adobe reports that mobile devices accounted for nearly half of online shopping visits while comScore estimates that mobile eCommerce spending increased 53 percent from last year on Cyber Monday.

If the consumer shopping trends observed from Thanksgiving through Cyber Monday continue, merchants can expect to generate a lot of revenue in the mobile channel this holiday season. According to estimates from Adobe’s Digital Index, mobile shopping visits exceeded desktop site visits on Thanksgiving Day. Consumers continued to favor mobile devices more this year on Black Friday and Cyber Monday as well.

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Mobile Payment Volume at the Point-of-Sale Will More Than Double in 2015 and is Expected to Grow by More Than 200 Percent Next Year

According to a new forecast from eMarketer, U.S. mobile payments at the point-of-sale, including NFC, QR codes and other methods, will grow from under $4 billion in 2014 to nearly $9 billion this year before really taking off in 2016 when mobile contactless payments are expected to exceed $27 billion. The number of mobile proximity payment users in the U.S. is expected to double over this time frame while the average amount each user spends via mobile at the point-of-sale grows nearly threefold.

While the number of consumers in the U.S. who make mobile payments at the point-of-sale is increasing quickly, it is still only a small subset of all mobile users. eMarketer estimates that 10 percent of smartphone owners made a mobile POS purchase in 2014, and this is expected to grow to 19 percent by the end of 2016. By 2019, however, it is forecasted that nearly one-third of smartphone users and more than one-quarter of all mobile phone users will make at least one mobile POS purchase per year.

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PayPal Evolving P2P Payment App Venmo to Support Online and Mobile B2C Transactions

The popular person-to-person payment service Venmo has continued to grow in terms of its user base and total payment volume, but with transaction fees waived for bank account and debit card based payments the company likely hasn’t yielded much profit. Intent on changing that, parent company PayPal recently announced plans that will enable merchants accepting PayPal to begin accepting Venmo for business-to-consumer transactions online and via mobile apps. PayPal CEO Dan Schulman said Venmo will be “fully monetized” by the end of 2016.

The company will start by targeting existing PayPal merchants. Tests will start by the end of this year where merchants will be able to accept Venmo and pay the same rates they do to accept PayPal, typically 30 cents per transaction plus 2.9 percent.

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Study Finds Significant In-App Theft and Click Fraud in the Mobile Channel

Examining millions of in-app transactions and billions of in-app clicks over the first five months of the year, a recent study from Apsalar estimated an in-app transaction fraud rate of nearly 7.5 for virtual goods and an in-app click fraud rate of more than 2.5 globally, meaning for every legitimate click or transaction there were this many that were fraudulent or unexplained.

Apsalar, an omni-channel data management platform, examined over 200 million in-app transactions for virtual goods and over 10 billion in-app clicks occurring between January and May 2015 for fraud. The study sought to quantify the level of click fraud in the mobile channel by measuring the click-to-install fraud rate and in-app purchase fraud rate across countries and worldwide.

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