Businesses emphasis on combating fraud intensifies amid growing financial losses and business repercussions due to fraudulent activities
In the dynamic world of eCommerce, the battle against payment fraud is a constant challenge. A new report by Cybersource, in collaboration with The Merchant Risk Council (MRC) and Verifi, reveals that payment fraud is having a significant impact on online businesses across all key performance indicators.
The 2022 Global Fraud & Payments Report highlights that more revenue is being lost to fraud, more eCommerce orders are being rejected as fraudulent, and more orders are leading to chargebacks and disputes. This trend is concerning, as merchants continue to spend about 10% of eCommerce revenue on fraud management, despite rising fraud KPIs and revenue losses over the past year.
To combat this, a majority of eCommerce merchants are encouraging customers to pay via their preferred methods to minimize the risk of payment fraud. However, they are also increasingly relying on less widely used but highly effective tools such as company-specific fraud scoring models, biometric indicators, and multi-merchant / order velocity monitoring.
Interestingly, the report also indicates that merchants of all sizes have reprioritised their fraud management strategies, with a focus on reducing fraud and chargebacks as the primary imperative. This shift in focus is a positive step towards addressing the growing challenges posed by payment fraud.
Another interesting finding is that 60 percent of merchants seek to reduce or eliminate their reliance on manual order review in fraud management strategies. This suggests a move towards more automated and sophisticated fraud detection systems.
However, the report does not provide information on which companies reported increased fraud costs for merchants across seven key KPIs in the 2022 Global Fraud & Payment Report.
Despite the challenges, there is a silver lining. The report also states that merchants are finding it less difficult to stay up to date on payment regulations and payment partner rule changes, thanks to PSD2 mandates and 3DS technology.
In the face of these challenges, partnering with a robust fraud management solution like Cybersource can help merchants strike a balance between mitigating fraud attacks while maintaining a positive customer experience. By employing sophisticated data models, Cybersource offers a comprehensive solution to the growing problem of payment fraud in eCommerce.
