Online payment fraud to cost retailers 25bn dollars by 2024

A new study from Juniper Research finds e-commerce merchant losses to online payment fraud will exceed 25 billion dollars in 2024, up from 17bn dollars in 2020.

The report, called Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2020-2024, shows the popularity of online shopping and why payments pose a compelling target for fraudsters.

The research highlights that e-commerce merchants outside Europe must adopt similar measures to SCA (Secure Customer Authentication) including two-factor authentication, or they will suffer from increasing levels of sophisticated fraud.

The answer may lie in the shopping cart

According to Dizzi Pay, one hint of shopper behavior is analyzing the item mix in their shopping carts. Many merchants track customer behaviour for data and insights in regards to the purchasing funnel, but not for the purpose of fraud prevention. For example, purchasing one designer handbag is a highly “normal” behaviour, but buying a dozen designer handbags in one purchase is not.

China to account for 42 percent of online payment fraud

Juniper’s research shows China will account for 42 percent of all e-commerce payment fraud by 2024. This means merchants must take on a more educational role for their users, including cybersecurity practices, common fraud methods and changes to the checkout process to improve fraud mitigation.

Research co-author Nick Maynard explained: “The explosion of e-commerce means that fraudsters have evolved their tactics, and so merchants must also evolve. Merchants must educate their users in anti-fraud best practice, as the human element is consistently the most vulnerable to exploitation in the online payments ecosystem”.

Checkout must be fast and uncomplicated

Increased friction in the checkout experience must be minimised, or merchants will face increased cart abandonment rates. Juniper Research recommends that security vendors work with merchants to build security measures into shopping apps that ensure a low-friction user journey, whilst encompassing increased authentication requirements.

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