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How have global approaches to fraud & payments changed over the past year? Get the latest data and find out what’s top of the agenda for over 1900 ecommerce merchants in the 2023 Global Fraud Trends Survey…
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It wouldn't be completely off-base to argue that 2022 was a somewhat paradoxical year for ecommerce. History was made as online retail sales soared to new heights. And the market saw more businesses “go global” with more shoppers making purchases outside their own countries.
On the other hand, customer acquisition costs continued to rise. And retail keywords “bulk” and “budget” shot up as customers felt the pinch of inflation. This also saw the rise of BNPL options.
In this new report, we’ve surveyed a massive 1900+ fraud and payment professionals across key global ecommerce markets. We delve into how fraud strategies are adapting to threats, including budget allocation, dispute management and 3D Secure adoption.
So what has the growing globalized market, a bleak economic backdrop and expanding payment methods meant for fraud and payments? Download the full report to find out, but here are the headlines…
We asked merchants how their budgets for fraud prevention will change in the coming year. And 75% of merchants expect an increase both in terms of tools and personnel.
On average, almost 80% of merchants expect their fraud teams to grow. But a fraud team that is too large could suggest that resources aren’t being properly allocated. The fraud landscape is fast moving, so businesses won't be able to rely on manpower alone for long.
Has your business managed to strike a balance between technology and manual review?
Cross-collaboration remains a sticking point for the fraud team. Although perception of the fraud team continues to improve, it looks like they’re still working in silos.
Only 14% of Fraud teams report working closely with the Marketing team. But, as we know, promotion abuse is a huge threat to revenue. And only 22% of teams say they work closely with the Operations team.
It’s vital that the fraud team has a seat at the table. How else do you expect to get a handle on costly fraud risks, like fake accounts and fraudulent refunds/returns?
Opportunistic behavior from genuine customers is on the rise as money gets tighter. Policy abuse has increased for over 50% of merchants globally. And almost 60% of merchants say that fraud as a service is a newer threat that’s gaining traction.
The internet has facilitated the spread of fraudulent knowledge and ideas. And fraudsters are taking advantage of social media channels and platforms to teach otherwise good customers how to bypass security measures.
Over 50% of merchants globally say they’re losing up to $5 million a year as a result of account takeover. Around 30% of Canadian and Australian merchants believe that this figure is north of $10 million annually.
It’s no surprise then that it’s the direct and immediate financial impact of attacks that has merchants most concerned. But could you be underestimating other business impacts? Negative publicity, loss of customer confidence and operational costs of account recovery are also very expensive in the long-run.
The majority of merchants see most of their fraud on website orders. This isn’t at all unexpected as most online purchases are typically made through the company website. But we could see this change as mobile app orders become more popular.
Mobile commerce volumes are expected to hit $620.97 billion by 2024. And it’s estimated that nearly half of all ecommerce purchases will be made using a mobile device. Is your business prepared for this shift?
Of the disputes that they challenge, respondents say that they’re successful (on average) 60% of the time. This figure was 66% in 2021. But this slight drop could be related to the increasing popularity of new payment methods.
Only around a quarter of merchants globally say they are most successful challenging disputes on wallet payments. This struggle could become a serious problem as digital wallet users are set to exceed 5.2 billion globally in 2026.
Over 90% of the merchants surveyed consider 3DS “important” or “very important” to their fraud prevention strategy.
Adoption outside of mandated regions is likely being spurred on by the fear that fraudsters would turn their attention elsewhere. But we also can’t ignore the massive improvements made to the protocol. 3DS 2.1 offers a much more user-friendly experience. And 3DS 2.2 offers frictionless payments and exemptions to SCA on transactions that meet the criteria.
Over 90% of merchants across regions are worried about what 3DS means for conversion to some degree. Almost a quarter would say that they’re “very concerned”. Despite this, less than 60% say they are making use of exemptions to strong customer authentication (SCA). How many payments could your business be losing to unnecessary 3DS challenges?
Get the full data and insights by clicking here!
Lola Omo-Ikerodah, Content Writer
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