Online merchants are facing a crisis as e-commerce fraud continues to spiral out of control. According to a new survey from Ravelin, fraud has increased significantly in the last year, with payment fraud up 59%, account takeover up 51%, promotion abuse up 52%, refund abuse up 53%, and customer fraud / friendly fraud up 40%.
Online merchants are facing a crisis as e-commerce fraud continues to spiral out of control. According to a new survey from Ravelin, fraud has increased significantly in the last year, with payment fraud up 59%, account takeover up 51%, promotion abuse up 52%, refund abuse up 53%, and customer fraud / friendly fraud up 40%.
In response, merchants are increasing their fraud budgets and growing their fraud teams. The survey found that 75% of online merchants intend to expand their fraud budgets in the next 12 months (global average figure). In the UK, 62% will be spending more on managing fraud, while in France, the figure is 70%, in Germany, 74%, in the US, 69%, and in Canada, 84%.
In terms of fraud teams, 58% of UK online businesses surveyed plan to grow their teams, while 80% of merchants in Germany, 72% in the US, and 86% in Australia expect teams to grow in size.
However, many of these businesses – 78% – are opting to build their own in-house solutions to help tackle the problem, which are usually expensive to maintain and quickly become unsustainable as a business grows. In the UK, the figure is 80%, while in France it’s 81% and in Germany 77%.
Ravelin CEO, Martin Sweeney said: “Over the years merchants have built up fraud investigation teams which they’re justifiably proud of. But fraud continues to grow and mutate: simply throwing more people and money at the problem won’t make it go away. Losses will continue to grow.
“Businesses need to get on the front foot managing fraud: using automation to nip fraudulent transactions in the bud. Better automation helps teams scale and frees up fraud investigators from mundane tasks enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth. With the economy in an uncertain place, enabling growth must become the priority.”
The survey also found that machine learning and two-factor authentication (2FA) are being adopted more regularly by e-commerce businesses to help with the issue.
Sources: https://www.zawya.com/en/legal/crime-and-security/e-commerce-fraud-is-fast-becoming-a-crisis-for-merchants-across-the-globe-nn8vklqr
