November 27, 2012, 1:03 PM

Less than 1% of mobile transactions are denied for fraud

Apple iOS mobile platform is the most popular for shoppers—and criminals, iovation finds.

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Online retail transactions from mobile devices have increased more than 300% over the past year, with most mobile shoppers as well as criminals attempting fraudulent transactions now using Apple Inc. devices running the iOS platform, finds fraud prevention technology vendor iovation Inc. These devices include the iPhone, iPod Touch and iPad.

Mobile retail transactions as a percentage of overall volume has been steadily rising from less than 3% in Q3 2011 to nearly 9% during Q3 2012—and that percentage is expected to grow significantly during the 2012 holiday quarter, iovation says. At the same time, iovation reports through its ReputationManager 360 fraud monitoring and protection service that denial rates during Q3 2012 for online shoppers using mobile devices were highest on Apple devices, with the iOS platform having nearly twice the denial rate for Google Inc.’s Android. The two platforms accounted for the vast majority of shopping and denial activity, with BlackBerry and Windows Mobile being statistically insignificant, iovation says.

During the third quarter of 2012, iovation monitored nearly 51 million transactions combined for all mobile devices. Of the nearly 30 million iOS transactions, more than 162,000 were denied (0.55%), iovation says. Android accounted for about 20 million transactions, with about 58,000 denials (0.29%), the company adds.

“While mobile devices account for a small percentage of total online shopping transactions thus far, that percentage has more than tripled in 12 months, and must be accounted for by retailers when it comes to fraud prevention,” says Scott Olson, iovation’s vice president of products. “Cyber Monday is a great reminder to assess risk strategies across all online shopping experiences, including mobile devices.”

Through its ReputationManager 360 service, iovation tracks the reputations of desktops, laptops, mobile phones, tablets, gaming consoles and smart TVs. By using information gathered across a network of thousands of security professionals, iovation says, the company can help merchants determine whether a device would be likely to conduct a fraudulent transaction. The network, iovation says, makes it possible to proactively identify devices associated with abuse and stop criminals before they can commit fraud.

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