Merchants accepting mobile phone payments had the highest card-not-present fraud volume in 2009, according to a Javelin Strategy and Research survey.
The survey found that, on average, retailers faced about 3,400 attempts to perpetrate fraudulent transactions per month.
Because of this high volume, 38 percent of counterfeit transactions go through undetected, says Javelin analyst Alan Ruperto.
Fraud losses as a percentage of total revenue were 1.13 percent for mobile merchants, versus 0.83 percent for online-only merchants, and 0.86 percent for merchants with both online and brick-and-mortar outlets.
In spite of the higher fraud risks, 25 percent of retailers in the Javelin poll said they planned to start accepting mobile payments within the next year, according to Jim Rice of LexisNexis Risk Solutions.
The Javelin survey found that the bulk of consumer card fraud occurs on existing debit and credit card accounts, with credit and debit card fraud respectively accounting for 65 percent and 28 percent of all existing card fraud last year.
Merchants say they are fighting fraud by increasingly outsourcing transaction and customer profile databases to third-party risk management providers.
They also are increasingly using point-of-sale authentication devices, Internet protocol address detection, rules-based filters, and tracking tools and online-purchase authentication systems.