Global online payment fraud losses are projected to rocket by over 50% across the coming four years to exceed $25bn per year, highlights a report from Juniper Research.
The report, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2020-2024, suggested a 52% growth in losses to various scams.
Growing popularity of online shopping in tandem with enhanced security of card-present transactions, for example through the EMV initiative, is helping to move much more fraud into e-commerce, it was suggested.
Secure Customer Authentication (SCA)
This is regardless of the launch of Secure Customer Authentication (SCA) checks in Europe, although this initiative has been delayed. The new rules, part of the EU’s PSD2 banking regulation, will now come into force by December 31, 2020 in Europe, and March 2021 in the UK.
These rules force some transactions to be subject to two-factor authentication to help lock fraudsters out. Concerns exist though that SCA might also create extra user friction which is off-putting for consumers.
Juniper Research asks traders to work closely with security vendors to design and implement extra authentication checks in shopping apps that minimise friction.
E-commerce providers must take a more educational role, providing information to customers on the need for improved cybersecurity and changes to checkout processes, as well as details on some of the most popular scams.
The analyst claimed this was particularly important in China, which it said will account for 42% of e-commerce fraud by 2024.
The explosion of e-commerce means that fraudsters have evolved their tactics, and so merchants must also evolve,” suggested report co-author, Nick Maynard.
“E-commerce merchants must educate their users in anti-fraud best practice, as the human element is consistently the most vulnerable to exploitation in the online payments ecosystem”.
In this changed world of 2020, E-Commerce is now a lifeline for both consumers and commerce, and it is imperative like never before that measures that work are put in place, or the whole sector could degenerate into an untrustworthy version of the ‘Wild West’.