eCommerce Fraud in 2024: Trends, Challenges, and Prevention Strategies
2024-08-06 07:16
New research from Juniper Research states that merchants lost around USD 38 billion to online fraud in 2023 alone, and these figures will rise to USD 91 billion by 2028. Combined, merchant losses from online payment fraud will exceed USD 362 billion globally, between 2023 and 2028, directly influenced by an increase in ecommerce transactions in emerging markets.
In a market analysis released by Ekata, the most common types of online payment fraud that will affect merchants in 2024 include account takeover (ATO), friendly fraud/chargeback abuse, synthetic identity theft, promo abuse, e-gift card fraud, affiliate fraud, and triangulation fraud. According to the MRC report on Global Payments & Fraud, the most prevalent types of fraud in 2023 were chargebacks, refund abuse/coupon abuse, account reactivation, identity theft, and card testing. At the same time, about 85% of merchants have already started implementing Strong Customer Authentication (SCA) to comply with the existing Eu’s PSD2 regulations and in preparation for the third initiative, PSD3.
Chargeback and friendly fraud remain the most pressing challenges merchants face. For many consumers, chargebacks are now easier to file with an issuing bank, and some will take advantage of the permissive system to commit fraudulent activities. As a result, friendly fraud has been on the rise throughout 2023, especially as alternative payment methods like BNPL increased in popularity and reached millions of new customers globally.
Those who want to effectively combat fraud and move fraud orchestration beyond checkout have turned to behavioural biometric analytics and pre-checkout profiling. This not only helps reduce friction for consumers but also makes the entire shopping process more trustworthy.