E-commerce fraud to surpass $20 billion this year

Research finds merchants need to do more to implement fraud prevention

E-commerce fraud has increased by almost a fifth in a single year, according to the latest from Juniper Research. 

Between 2020 and 2021, e-commerce fraud grew by 18% from $17.5 billion to over $20 billion as criminals focused on the COVID-19-fueled surge in online shopping.

According to the report, this means fraudsters exposed insecure fraud-mitigation processes from unfamiliar and unprepared merchants for the continuing challenges in this market.

The research found that while merchants want to reduce fraud rates from their current levels, they’ve been reluctant to introduce extra friction into the checkout process. The report identified that clear messaging around security checks and automated behavioral analytics leveraging artificial intelligence (AI) is key to preserving the user experience.

“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,” said co-author, Susan Morrow.

Researchers claimed China will be the largest single e-commerce fraud market in the world, accounting for over 40% of the worldwide e-commerce fraud losses in 2025. That would amount to over $12 billion in fraud. The report’s authors cited China’s massive e-commerce market and relative lack of fraud detection and prevention platform deployment as the key drivers.

Related Resource

NETSCOUT threat intelligence report

Cyber crime: Exploiting a pandemic

Threat intelligence report - whitepaper from NETSCOUTDownload now

Juniper Research also recommended merchants operating in China should invest in fraud detection and prevention now. Otherwise, they’ll increasingly face damage to their already slim operating margins.

The research echoes similar findings by fraud-detection company Ravelin. According to its Retail Ecommerce Fraud & Payments Survey released earlier this month, 76% of retailers predict their budget to tackle fraud will increase in the next 12 months, with one in five anticipating a “significant” increase.

Ravelin CIO Mairtin O’Riada said the COVID-19 pandemic created a “petri dish” that is growing volumes of fraud.

“Retailers are scrambling to drive e-commerce and are handling extremely high volumes of transactions online, while also trying to fulfill a growing number of online deliveries. At the same time, honest consumers and avid fraudsters are feeling the pinch of a shrunken economy — many have lost their jobs and money is tight,” O’Riada told HelpNetSecurity.

“Trying to detect fraud manually under these conditions is a difficult and expensive undertaking. Technology that can be built specifically to your needs can help detect fraud at the moment and help retailers to mitigate the effects of fraud significantly — helping to protect profit margins at a time they’re needed most.”

Featured Resources

B2B under quarantine

Key B2C e-commerce features B2B need to adopt to survive

Download now

The top three IT pains of the new reality and how to solve them

Driving more resiliency with unified operations and service management

Download now

The five essentials from your endpoint security partner

Empower your MSP business to operate efficiently

Download now

How fashion retailers are redesigning their digital future

Fashion retail guide

Download now

Recommended

How to use machine learning and AI in cyber security
Security

How to use machine learning and AI in cyber security

30 Jul 2021
Chipotle’s marketing email hacked to send phishing emails
phishing

Chipotle’s marketing email hacked to send phishing emails

29 Jul 2021
The top 12 password-cracking techniques used by hackers
Security

The top 12 password-cracking techniques used by hackers

29 Jul 2021
Colonial Pipeline hack spurred copycat attacks on other oil and gas companies
hacking

Colonial Pipeline hack spurred copycat attacks on other oil and gas companies

29 Jul 2021

Most Popular

The benefits of workload optimisation
Sponsored

The benefits of workload optimisation

16 Jul 2021
Samsung Galaxy S21 5G review: A rose-tinted experience
Mobile Phones

Samsung Galaxy S21 5G review: A rose-tinted experience

14 Jul 2021
RMIT to be first Australian university to implement AWS supercomputing facility
high-performance computing (HPC)

RMIT to be first Australian university to implement AWS supercomputing facility

28 Jul 2021