E-commerce fraud is set to spike 18% from 2020-2021 to top $20 billion globally this year, according to the latest research from Juniper Research.
The value of online losses will grow from around $17.5 billion in 2020 as scammers continue to target the growing number of internet shoppers forced online by the pandemic.
According to the new report, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2021-2025 Market Research, merchants are increasingly on the back foot when it comes to mitigating online fraud.
It calls out AI-powered behavioral biometrics as an important step forward in technological innovation which could help these businesses fight back without adding extra customer friction to the purchasing journey.
Such tools can work away in the background to identify each user by the unique way they type, use their mouse, fill in web forms or carry out other tasks. That would limit the number of transactions that must be flagged for manual review or extra authentication checks.
Clear messaging around the need for these extra checks is also important to help manage customer expectations at the online check out, Juniper Research said.
“While the need for security is greater than ever, the competitive e-commerce environment means merchants will need to ensure that extra security checks are justified to the user, or they risk higher cart abandonment rates,” warned co-author, Susan Morrow.
New Strong Customer Authentication (SCA) requirements deferred because of COVID-19 will finally come into force in the UK this September, adding to the burden on merchants. Those who haven’t planned the transition could end up being forced to add extra authentication checks.
Juniper Research claimed that China would be the largest market for e-commerce fraud in the world, accounting for over 40% of global losses in 2025, at over $12 billion. It warned merchants there to invest in advanced solutions now to protect their slim operating margins.