As the online travel markets grows, so does card-not-present (CNP) fraud. Online travel businesses must accommodate the influx of mobile consumers, while ensuring they have adequate tools to scrutinize these orders for fraud.
By 2020 the global online travel market is expected to be worth a whopping $817 billion. Mobile sales, or mCommerce, are becoming an increasingly important revenue stream within this market. In fact, mobile purchases will soon account for 70% of all digital travel sales in the US.
Unfortunately, as the online travel markets grows, so does card-not-present (CNP) fraud. Online travel businesses must accommodate the influx of mobile consumers, while ensuring they have adequate tools to scrutinize these orders for fraud. Riskified reviews hundreds of thousands of online travel orders. While analyzing our data on fraud in online travel, we uncovered interesting patterns related to travel mCommerce.
Mobile is safer
Contrary to popular belief, mobile orders are currently safer than desktop orders. Specifically, our data shows that mobile travel orders are 31% less likely to be fraudulent than desktop orders. Mobile travel purchases are consistently safer even in high-risk order segments, such as last minute bookings.
The rate of fraud in desktop purchases made a day before the travel date is 8%. This means 8 of every 100 last-minute desktop travel orders are clear-cut fraud. On the other hand, the fraud rate for last-minute orders made via mobile devices a day before the travel date is just 2%. In last minute travel bookings, desktop purchases actually carry 4 times more risk than their mobile counterparts.
Fraud rates in last minute online flight ticket orders:
The lower rate of fraud in mobile purchases may reflect the fact that more travelers are buying tickets while on-the-go. Handheld devices are often the most convenient way for travelers to book flights and buy tickets when in-transit. In addition, many ‘tools’ and techniques commonly used by perpetrators of online fraud were developed for use via desktop computers, and are not as effective when applied to mobile devices. The risk landscape may change as mCommerce volume grows and fraudsters develop new methods and tools for perpetrating fraud through mobile devices. In the meantime, however, the mobile channel is actually safer.
The fraud is in the details
Although mCommerce is safer, fraud still exists in transactions placed via handheld devices. We analyzed mobile orders to identify trends that can help travel merchants know where to focus fraud prevention efforts.
Mobile fraud by operating system
Analyzing mobile orders based on the operating system provides some interesting insights. Of mobile travel orders reviewed by Riskified for fraud, 65% were placed via Apple devices (iOS operating system), and 34% were placed through devices with an Android operating system. Among these orders, the fraud rate for Android orders was about 52% higher than in orders made via iOS. The rate of clear-cut fraud in purchases via Android devices was 1.4% vs. a fraud rate of only 0.9% in orders placed via iOS-powered devices.
Mobile fraud by web browser
Even if you’ve built a dedicated mobile app, some customers may still book flights or hotels on your website’s mobile version. Riskified’s data shows that the vast majority of shoppers placing mobile travel orders do so through Safari and Chrome browsers. The Android stock browser, which is the default browser on many Android devices, accounted for only 3% of mobile travel orders processed by our systems. However, of all mobile browsers is appears that the Android stock browser is the one most commonly abused by fraudsters. In fact, 3% of travel tickets purchased via mobile devices with an Android browser are clear cut fraud. Safari and Chrome mobile orders are significantly safer, with fraud rates of 0.9% and 1.2%, respectively.
Don’t let fear of mobile fraud hold you back
Travel merchants have no reason to feel intimidated by the ascent of mCommerce. On the contrary, mobile orders are actually safer and should be embraced as a tremendous business opportunity. By analyzing the wealth of data that exists regarding mobile shopping, airlines and OTAs can pick up on key trends that will help them ensure good customers are not falsely declined while chargebacks are kept to a minimum.