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Technology

Online Payment Fraud Set To Soar Over Next Five Years, Study Finds

Cumulative merchant losses to online payment fraud are expected to exceed $343 billion (€338.4 billion) between 2023 and 2027, a new study by Juniper Research has found.

The study says that losses are likely to occur through multiple channels – including the sale of digital goods, physical goods, money transfer transactions and banking, as well as purchases like airline ticketing.

In addition, fraudster attacks such as phishing, compromised email accounts and socially-engineered fraud is also likely to remain high.

The full extent of the losses, $343 billion, equates to more than three and a half times the reported net income of Apple in the 2021 fiscal year, indicating the massive potential extent of these losses.

No 'One Size Fits All'

“Fundamentally, no two online transactions are the same, so the way transactions are secured cannot follow a one-size-fits-all solution," commented Nick Maynard, Juniper Research.

"Payment fraud detection and prevention vendors must build a multitude of verification capabilities, and intelligently orchestrate different solutions depending on circumstances, in order to correctly protect both merchants and users.”

Physical Goods

Physical goods fraud is likely to be the largest single source of losses, accounting tor 49% of cumulative online payment fraud losses globally over the next five years, an increase of 110%.

As a result of this, the report encourages merchants to adopt strong anti-fraud measures, including multiple sources of address verification and multi-factor authentication.

'The research found that in order to combat rising fraud, fraud prevention vendors must orchestrate the right mix of verification tools, at the most effective point in the customer journey, to best protect users, but that this will require significant capabilities to achieve,' it added.

Read More: European E-Commerce Grows 13%, But Challenges Lie Ahead

© 2022 European Supermarket Magazine – your source for the latest technology news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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