mobile payments are on the rise – and so is fraud

Is Mobile Channel a Higher Risk?

In 2017, the mobile retail payments will exceed $220 billion in the US alone, according to Javelin Strategy & Research. 

It is not much different around the globe, as smartphones are becoming a common basic tool for payment. Owned by 44 percent of world population, smartphones will be used by up to 80 percent of people on the planet by 2020, according to Statista. 

It is no surprise then that merchants have, in the last five years, become increasingly interested in supporting mobile sales channels. The percentage of merchants who have been an active support has grown from 54 to nearly 80 percent, according to the 2017 Mobile Payments and Fraud Survey.  

Frauds in mobile payments are on the rise as well: 40 percent of merchants have faced fraud via that channel, revealed the 2017 Mobile Payments and Fraud Survey. That’s twice as much than in the previous year. Most merchants aren’t quite sure how big of an issue mobile fraud is for them but only 8 percent are completely sure it is declining.

Merchants are getting better at detecting whether a transaction is coming from a smartphone. In the last five years, the number of merchants that can detect mobile shoppers has grown from 15 to 55 percent.

They are also getting better at managing mobile channels: almost half the merchants now have dedicated mobile websites and 44 percent have mobile apps.

Investments in mobile apps have doubled in just one year and the promise of better omnichannel analytics for merchants via the introduction of new POSs and customers’ acceptance of mobile wallets is driving new opportunities.

Top tools for preventing mobile fraud


Sune Gabelgaard, Senior Analyst at Danske Bank, works with fraud in payments, mobile payments, internal fraud and the card fraud area. We asked him couple of questions about mobile payments in Denmark and their experiences with mobile payments fraud.

What is the adoption rate of mobile payments in Denmark?

Our Solution, MobilePay, has a very high adoption rate in Denmark: it is installed on 9 out of 10 smartphones and more than 3.5 million people use it regularly. MobilePay was launched in May 2013 as a very simple money transfer app. 


On the first day, more than 25.000 people downloaded it. Even today, four years after the initial launch, more than 1300 new users sign up every day.

What started out as a P2P app is now a true omnichannel mobile payment solution covering everything from P2P, online and in-app payments, payments at POS terminals, as well as new services, such as invoice and subscription payments. 

What is the adoption rate of mobile banking vs. internet banking?

In the Nordic countries, 8 out of 10 persons have a smartphone. The vast majority of logins are coming from mobile devices, and mobiles actually surpassed internet banking 4 years ago.

What are the trends in mobile payments in Denmark?

We process close to 200 million MobilePay transactions annually. An increasing number of customers are using MobilePay for online and in-app payments: 74% of all tickets sold via the Danish State Railway app is paid for via MobilePay. More than 6.800 webshops accept MobilePay as a means of payment. 

We also recently launched a new payment solution, allowing customers to use MobilePay at existing terminals at supermarkets, such as Spar. Transactions at POS terminals will be the next big thing, as many customers have expressed a wish to be able to leave their wallet at home.

How has mobile payment fraud prevention changed since the early days until now?

Payment fraud is constantly evolving and so is the fraud related to mobile payments. We constantly analyze fraud cases to ensure that our fraud monitoring system is able to detect the most recent fraud trends. As MobilePay has evolved into a mobile payment solution customers can use for basically everything, fraud has also changed. Despite this, fraud levels are still very low, compared to the ones on our domestic debit card (Dankort).