Everyone Faces Fraud in Mobile Game Web Stores. But How Do You Fight It, Exactly?
Managing a mobile game web store can be a rewarding venture, with publishers increasing their margins by up to 25 percent per transaction. But selling outside the Apple and Google ecosystems also comes with its own set of challenges, particularly when it comes to fraud and chargebacks – which have grown by 20% annually.
Picture this: one of your players decides to file dispute claims on thousands of dollars worth of past transactions, for no justifiable reason. This is not a hypothetical scenario – it’s a real case we recently encountered in one of our partner’s stores. What do you do? How do you fight this?
There are typically two options as a publisher: issue an automatic refund, which of course means losing revenue.
Or, collect evidence – such as player activity logs and previous communication with the player – and file a counter dispute file to the bank.
Luckily for this publisher, they had us as their Merchant of Record (MoR) to fight their corner and win them back their money. But this anecdote is just one of many types of fraud that can plague mobile game web stores. From abusive dispute behavior to stolen credit cards, we’ve seen it all. Below, I share what to look out for and our advice for how you too could combat fraud.
Types of Fraud
First thing’s first, let’s establish the 5 most popular types of payment fraud in mobile game stores:
1. Abusive Disputes
One of the most common forms of fraud we see involves players abusing the dispute process. Players submit numerous disputes on payments they’ve been charged for, often due to dissatisfaction with the game or buyer’s remorse. In some countries, disputing payments is as simple as a few clicks in a banking app.
How to spot it: When a user sends a dispute, they must give a reason such as “Item not received”. You can spot an abusive dispute claim in this case by investigating player activity logs. If you see the item in question was added to the user’s in-game profile, their claim is highly likely to be fraudulent.
2. Claims of Unauthorized Payments
Another frequent issue is players claiming someone unauthorized – such as their underage child – made the payment.
How to spot it: If the payment was made using Google/Apple Pay, which requires authentication phases such as FaceID, it’s clear the claim is fake.
3. Creating Multiple IDs and Disputing Transactions
We also encounter players creating multiple accounts – for instance, if they get blocked by the publisher for chargeback abuse, or if they ask to be blocked as they’re addicted to the game, but then regret this and want to re-enter. They then proceed to submit unjustified chargeback claims out of frustration. This can create significant financial losses and administrative burdens for publishers.
How to spot it: A telling sign of this kind of fraud is if you find multiple player IDs, all associated with one email or credit card, that are sending disputes.
4. Using Multiple Credit Cards from Different Countries
An obvious one – fraudsters often use multiple credit cards from different countries to make fraudulent purchases. These cards are usually stolen, and the legitimate cardholders will eventually dispute the charges.
How to spot it: You can spot this kind of fraud by tracing a single user ID to multiple transactions all with numerous different credit cards.
5. Emulator or Bot Usage
Fraudsters are known to use emulators or bots that use stolen card information. These tools can manipulate in-game economies and generate unauthorized in-app purchases.
How to spot it: You can spot this kind of fraud if the same player sends numerous payment attempts in an extremely short amount of time. Your team or Merchant of Record should automatically flag this kind of activity.
Combating Web Store Fraud
Now that we have a better grasp of the popular types of fraud you’re likely to encounter, let’s switch gears to discuss how to combat them.
Fighting fraud without Apple or Google’s support may seem daunting, but there are various tactics that can help you limit fraudulent activity, or at least manage it effectively when it does happen.
What’s more, you don’t have to do it alone. In fact, working with a gaming-focused Merchant of Record like Appcharge means you don’t have to do anything at all: we take payment disputes and fraud off your plate entirely, so you can focus on building a kick-ass web store.
But whether you decide to handle fraud with in-house specialists or let an MoR take responsibility for everything, here are our tips for helping you run a tight ship:
1. Maintain Organized Records of Player Activity
Ensure you have an organized record of player activity in your game, so you have a bank of evidence to help dispute false claims.
2. Monitor for Unusual Patterns
Hire fraud analysts to monitor for unusual transaction patterns and flag transactions that seem suspicious.
3. Use Anti-Fraud Engines
In addition to human-led monitoring, use dedicated fraud engines that leverage AI and machine learning to detect and block fraudulent transactions. Dedicated engines are generally more effective than the fraud technology offered by PSPs. The right engine will also know how to minimize false positive cases – in which transactions are blocked after being falsely flagged as fraudulent.
4. Provide Alternative Payment Methods (like digital wallets) in your web store
In contrast to credit cards, most digital wallets (like Apple Pay) require another form of authentication to complete a transaction. With 5.3 billion users expected to use digital wallets by 2026 – more than half the world’s population – make sure you provide a broad range of digital wallet options to ensure every user gets their preferred method. In doing so, you’ll reduce the amount of fraudulent activity on your web store, increase your conversion rates, and provide a great UX.
New Revenue, New Headaches
Despite the ongoing battle publishers face against fraud, web stores present a tantalizing opportunity. The fact that Playtika earns 25% of their total revenue from D2C sales is testament to this. Other leading publishers, like Huuuge Games, are also seeing healthy growth in D2C revenue, expecting it to reach mid-teens as a percentage of total revenue in 2024. In other words, the juice is definitely worth the squeeze!
While some publishers may choose to handle fraud by hiring in-house specialists, most choose to use Merchant of Record providers to take on full responsibility for all of this.
If you’re interested in learning more about the day-to-day fraud struggles my team handles on behalf of our partners, reach out at appcharge.com, or drop me a message on LinkedIn!
