Solutions overview
Harness the power of your data
Support and investigations
Support services for Ravelin
Online payment fraud
Account security
Policyabuse
Marketplace fraud
3DSecure
Resource Zone
Deep dives on fraud & payments topics
API & developer docs
APIs, glossary, guides, libraries and SDKs
Global Payment Regulation Map
Track PSD2 & more with a full report
Blog
The latest fraud & payments updates
Insights
In-depth guides to fraud, payments & security
About Ravelin
Discover the story about Ravelin
Careers
Join our dynamic team
Customers
Read more about our happy customers
Press
Get the latest Ravelin news
Support & investigations
Accept more payments securely
Protect your customer accounts
Policy abuse
Stop policy abuse to protect your bottom line
Ravelin for marketplace fraud
3D Secure
Ravelin 3DS & SDKs
Resource zone
Global Payment regulation map
Read more about our happy custmomers
Blog / Fraud Analytics
Free-to-play games can be vulnerable to in-app purchase fraud against digital goods and in-game currency - causing losses and negative customer experience. How does it work and how can gaming apps stop it?
Share this article:
In 2019, the global games market was worth a total of 148.8bn, with mobile game revenues accounting for 68.2bn - 46% of the total - a jump of 9.7% YoY.
This reflects the growth in ‘freemium’ games - games that are free-to-play, with in-app purchases to continue past a certain point or upgrade/advance to another level. The customer can make microtransactions within the game itself - known as in-app purchases.
Some of the biggest F2P digital games are Fortnite, League of Legends and Candy Crush Saga.
In-app purchase fraud is particularly damaging for freemium games that allow the customer to make microtransactions through their own storefronts. Games with storefronts managed by Apple/Google will pay a commission to them and benefit from guarantees on chargebacks. However, these platforms will adapt their pricing dependent on the individual game risk level and chargebacks.
How do fraudsters commit fraud on in-app purchases? Specifically, we’re focusing on fraudsters that use stolen cards to extract value from the game.
For gaming app developers, the financial costs of in-app purchase fraud are worrying. As well as chargebacks which arise from the use of stolen cards, the app also loses the value from the customer who paid out to the fraudster instead of the app. Reselling goods bought with stolen card details can be a highly lucrative business for fraudsters - with items like rifle skins selling for up to $60,000.
Additionally, the cost to acquire a new user and get them to make an in-app purchase for the first time is increasing. It costs an average of $4.37 to acquire a new user for a mobile game, up 17% YoY. And to get a user to make a first-time purchase, it costs an average of $35.42.
In-app purchase fraud disrupts the economics of a game and allows some players to gain an unfair advantage. This can destroy not only the game economy, but also the strong gaming community, which many games rely on for the longevity of the game. Developing a digital game is a long and expensive process, and so developers can’t afford to lose players and start from scratch over and over again.
How can you stop fraudulent in-app purchases? It’s challenging, particularly when assessing new users with no purchase history.
We use a combination of machine learning and graph network analysis to identify when new accounts are a fraud risk. Here’s what to look for to stop fraudster purchases:
To learn more about how machine learning works to score users on their email address, location and hundreds of other variables, check out the machine learning insights page. To understand more about how graph networks enable you to link users by device, location or other shared properties, read insights on link analysis.
Jessica Allen, Head of Content
Fraud prevention is a delicate balance between stopping fraud and maintaining good customer experiences. But what is the most effective way to measure this outcome?
Ravelin Technology, Writer
Blog / Machine Learning
Online payment fraud is one of the biggest threats facing grocery merchants. And it’s only gotten worse. How are fraudsters using the cost of living crisis to take advantage of your business?
There’s a new fraud threat on the rise – and it’s your customers. First-party fraud is infamously tricky to catch and a huge revenue risk. How can you detect and deter criminal behavior in your customer base?