The holidays are looming large on the calendar and people are starting to think of family, friends and food.
But there’s one other f-word that security analysts say they should be thinking about: fraud.
Tis soon to be the season for shopping, and a study by Riskified, an Artificial intelligence-driven e-commerce fraud management platform, revealed as the volume of purchases surges during the holiday season, the overall volume of fraud tends to follow suit.
Inflation is likely to have a significant impact on holiday shopping this year, leading merchants to cut their sales forecasts.
But instead of just competing on just low prices, the study said merchants should improve: mobile commerce – or mCommerce – and digital payments.
“With almost half of eCommerce holiday sales expected to come from mobile devices and digital payments growing in popularity, it’s more important than ever to provide a safe, seamless path to purchase,” the report said.
A steady decade-long growth of mCommerce is a natural result of the uptick in eCommerce sales, Riskified said, including the pandemic-era boom.
When the lockdowns went into effect, people came online in droves to work, study, socialize, and shop – many through mobile devices.
Merchants had to quickly ramp up their digital presence, including mobile-enabled experiences, like contactless payments, in-store pickup, and curbside delivery.
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During the pandemic, worldwide mobile shopping via websites and apps increased by an average of nearly 50%.
“Two years on, mCommerce has gone mainstream and is on track to become consumers’ preferred channel,” the report said. “By 2025, retail mCommerce sales should more than double to reach $728.28 billion, accounting for 44.2% of retail eCommerce sales in the U.S.”
Mobile shoppers are not a particularly patient bunch, the report noted, as smartphones and tablets have the highest average cart abandonment rates at 86% and 81%, respectively.
As a result, it is critical for merchants to prioritize steps like streamlining navigation, improving website load times, and simplifying checkout processes.
But all these bells and whistles are wasted if fraud prevention measures aren’t also elevated for mCommerce.
A more significant surge in legitimate transactions may “hide” a fraud problem, the report warned, making fraud appear to take a smaller share of the holiday pie.
Riskified warned that merchants should also be careful of falsely declining good customers, especially when demand and competition are so high.
Digital wallets streamline checkouts to a single click accounting for half of the world’s e-commerce payment transactions. Market share is expected to grow from 49% to 53% by 2025.
The report said that determined fraudsters can overcome even the most advanced, “fraud-proof” payments.
Among other things, the report encourages merchants to look for solutions that offer real-time decision capabilities and a form of chargeback insurance to protect the business all year long, but especially from increased chargeback costs during the holidays.
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