The Cyber Fraud Imperative for AI-Powered E-Commerce Apps

The rise of artificial intelligence-on-device technology will fuel the next major growth spike in mobile e-commerce, driving innovative retail brands ahead of the laggards. In 2025, AI-on-device technology like Apple Intelligence on iOS and Google Gemini on Android will transform the mobile user and consumer experience with personalized shopping experiences, easier search and discovery, and faster checkouts. While retailers race to explore these capabilities, they must also address significant cybersecurity and fraud risks. Malicious actors continue to launch increasingly sophisticated mobile attacks through social engineering, deepfakes, malicious bots and payment fraud, putting customers and mobile businesses at risk. Forward-thinking retailers are already exploring AI-based defenses to deliver seamless consumer experiences while ensuring a safe, fraud-free shopper journey.
Mobile and AI Fuel E-Commerce Growth
Global mobile e-commerce sales hit $4.34 trillion in 2023 and are projected to surpass $7.08 trillion by 2027. In 2023, 72 percent of global e-commerce sales occurred on mobile devices, far outpacing desktops. Surveys show that 85 percent of mobile shoppers prefer apps over mobile websites, making mobile apps critical for success. However, online payment fraud, including mobile transactions, is projected to reach $206 billion by 2025. According to the Appdome Global Consumer Expectations of Mobile App Security report, 58 percent of consumers cite fraud as their No. 1 concern, with 83 percent expecting brands to proactively protect them. An overwhelming 94 percent say they will advocate for brands that prioritize security, while 96 percent will abandon apps that fail to do so.
In 2025, retailers will leverage AI-on-device capabilities to deliver faster personalized shopping, real-time recommendations, smarter search (including visual and voice search), augmented reality try-ons, and seamless checkouts, to name a few. AI-on-device will enable AI bots to drive multiple mobile apps and services to interoperate seamlessly in a single workflow, providing new kinds of multi-app integrated experiences boosting consumer excitement and spend. At the same time, attackers will use AI to exploit these new mobile features.
Protecting Retailers From Rise of AI-Powered Cyber Fraud Attacks
Social engineering attacks on mobile retail consumers are evolving with AI-powered deepfakes, bots, and malware targeting identity theft and account takeover. Fraudsters are also using AI for FaceID bypass and more sophisticated payment fraud schemes aimed at mobile in-app transactions. For mobile retailers, these threats and attacks result in revenue loss, increased expenses, erosion of consumer trust, customer churn, and potential exposure to litigation or penalties.
Mobile retailers can combat these issues using AI-powered defenses built directly into mobile apps. These AI-powered defenses monitor and block threats in real time, protecting customers and intercepting fraud before it reaches backend systems. AI can also fine-tune the consumer experience, such as prompting users with safety messages and steering them away from danger. While proactively safeguarding against deepfake scams, identity theft, ATO, bots, unauthorized transactions, and payment fraud, these methods also ensure compliance with global regulations and maintain customer trust.
For developers of retail-related and payment software development kits (SDKs), the same AI-powered defenses are available at the SDK level, ensuring maximum security and fraud protection before integration into mobile apps. This approach guarantees that every component of a retail mobile app is protected from potential cyber fraud risks.
Growing the Next Generation of AI-Powered Mobile E-Commerce Safely
In 2025, AI-on-device technology will drive retail innovation in a myriad of new and exciting ways, boosting customer engagement and revenue growth. Simultaneously, the rise of AI-powered cyber fraud will test every mobile brand. Retailers must adopt proactive, AI-powered mobile defenses to protect their business and customers, creating a trusted and seamless global shopping ecosystem.
Brian Reed is senior vice president of app security at Appdome, AI native protection for mobile businesses.
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Brian Reed, senior vice president of app security at Appdome, leads the GTM strategy and partnerships, collaborating with account leaders, customer success teams, cybersecurity experts, and engineers. With over 25 years of experience, Brian is an entrepreneurial, execution-driven senior executive with a focus on high-growth, innovative companies in security, mobile, social, apps, SaaS, and AI MarTech. He has a solid track record of building revenue machines and category leaders, driving awareness and market penetration through compelling content and community engagement. Brian is also a recognized authority on Mobile Security and AppSec Testing, frequently contributing as a writer and speaker at industry events.Â