eCommerce losses to online payment fraud to exceed $20 billion in 2021
Losses due to online payment fraud in the eCommerce space will increase in 2021, according to new research.
A new study from Juniper Research has found that the value of losses due to eCommerce fraud will rise this year, from $17.5 billion in 2020 to more than $20 billion by 2021.
The increase represents a growth of 18% over a single year, Juniper Research says.
The research found that fraudsters have targeted consumers as they have increased their eCommerce use, exposing insecure fraud mitigation processes from merchants who are unfamiliar and unprepared for the continuing fraud challenges in this market.
The research identified that merchants need to do more to implement fraud prevention strategies across all of their eCommerce channels, or they will continue to experience large losses.
Juniper Research says the use of artificial intelligence will enable behavioural biometrics in this area, which will increase security across all potential fraud channels.
Increased Security Must Not Involve Increased Friction
The new research, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2021-2025 Market Research, found that while merchants will be keen to reduce fraud rates from their current levels, they will be hesitant to introduce extra friction into the checkout process.
uniper Research’s latest Online Payment Fraud research provides an extensive analysis of how the online payment fraud space is evolving, in reaction to changing fraudster tactics, as well as the impact of the COVID-19 pandemic on the digital ecosystem. This includes how the continued intensification of fraudsters’ efforts is creating opportunities for fraud prevention service providers.
The research report assesses how the landscape is changing in online fraud, with a focus on new fraud types and how fraud detection and prevention vendors can mitigate these.
The research positions 17 fraud detection and prevention vendors in a Juniper Research Leaderboard. The research also includes an extensive forecast suite, which includes fraud detection and prevention spend, as well as online payment fraud values.
The report identified that clear messaging around security checks and automated behavioural analytics leveraging artificial intelligence are key capabilities in preserving the user experience.
“While the need for security is greater than ever, the competitive eCommerce environment means merchants will need to ensure that extra security checks are justified to the user, or they risk higher cart abandonment rates," says research co-author Susan Morrow.
China Will Be the Single Largest eCommerce Fraud Market
The research also found that China will be the largest single eCommerce fraud market in the world, accounting for more than 40% of eCommerce fraud losses globally in 2025, at more than $12 billion.
The research identified a massive eCommerce market and a relative lack of fraud detection and prevention platform deployment as the key drivers behind this.
Juniper Networks says the report recommends that merchants operating in China should invest in fraud detection and prevention now, or they will increasingly face damage to their already slim operating margins.