93% of mobile transactions were fraudulent in 2019 across 20 countries

Anne Freier | January 30, 2020

App Business

A whopping 93% of mobile transactions were blocked as fraudulent in 2019 across 20 countries according to a report from mobile tech company Upstream.

Based on data from its Secure-D anti-fraud platform, the company said that of over 1.71 billion processed mobile transactions it blocked 1.6 billion as fraudulent.

These would have incurred costs of around $2.1 billion for users.

Industry estimates suggest that in-app and mobile ad losses are expected to reach $100 billion by 2023.

“Mobile ad fraud is a criminal enterprise on a massive scale,” explains Dimitris Maniatis, CEO of Upstream. “Though it may seem that it is only targeted at advertisers, it greatly affects the whole mobile ecosystem. Most importantly it adversely impacts consumers; eating up their data allowance, bringing unwanted charges, messing with the performance of their device, and even targeting and collecting their personal data. It is more than an invisible threat, it is an epidemic, calling for increased mobile security that urgently needs to rise up in the industry’s priority list. Left unchecked, ad fraud will choke mobile advertising, erode trust in operators and lead to higher tariffs for users.”

Upstream discovered up to 98,000 malicious apps last year, up from 63,000 in 2018.

Most of them were Android apps. That’s not surprising given that Android devices now account for 75-85% of all smartphone sales worldwide.

Although Google works hard to ensure that malicious apps are blocked around 32% of the 100 most active malicious apps in 2019 came from the Google Play store. Another 19% had previously been on Google Play but had since been removed.

Fraudsters are targeting some app categories more than others. Around 22.3% of malicious apps are productivity apps, followed by games (18.9%) and entertainment/shopping apps (15.7%).

“A key part of successfully tackling mobile fraud is awareness”, explains Maniatis, “something that the whole industry, surprisingly, lacks. With all indicators pointing that its value will grow in the hundreds of billions in the next three years, we cannot afford to remain idle. This is the main reason we steadily and openly share all our findings with the whole community.”

In certain markets mobile ad fraud is more dominant. These include Brazil and South Africa where cases exceeded 90%. Upstream says that customers in emerging markets were more vulnerable to ad fraud as they were less aware of the dangers.

“Mobile ad fraud remains a hidden threat for most consumers. It usually goes undetected and is not high on people’s agendas when choosing apps. However, as the industry delays its response, consumers should take steps to stay safe from mobile ad fraud in 2020. For example, by using anti-malware services like Play Protect, by only downloading from the official Play store after checking reviews carefully and keeping a close check on bills for unwanted subscriptions or charges”, added Maniatis.

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