BASINGSTOKE, England–(BUSINESS WIRE)–A new study of Juniper Research found that cumulative merchant losses due to online payment fraud worldwide between 2023 and 2027 will exceed $343 billion. For comparison, that equates to more than 350% of Apple’s reported net income in fiscal year 2021; showing the massive scale of these losses.
Online payment fraud includes losses on sales of digital goods, physical goods, money transfer transactions and banking, as well as purchases such as airline tickets. Fraudulent attacks can include phishing, business email compromise, and social engineering fraud.
Innovation needed in fraud prevention strategies
Research found that to combat growing fraud, fraud prevention vendors need to orchestrate the right mix of verification tools, at the most effective point in the customer journey, to best protect users, but this will require significant capabilities to achieve this.
Report author Nick Maynard explained: “Fundamentally, no two online transactions are the same, so the way transactions are secured cannot follow a one-size-fits-all solution. Payment fraud detection and prevention vendors need to build a host of verification capabilities and intelligently orchestrate different solutions based on circumstances to properly protect merchants and users.
Physical assets Largest area of fraud
The research identified purchases of physical goods as the main source of losses; accounting for 49% of cumulative online payment fraud losses worldwide over the next 5 years, growing by 110%. Lax address verification processes in developing markets are a major fraud risk, with fraudsters specifically targeting physical goods, due to their resale potential. As such, it recommends merchants adopt strong anti-fraud measures, including multiple sources of address verification and multi-factor authentication to reduce fraudulent incidents for merchants of physical goods.
Online Payment Fraud Market Research: https://www.juniperresearch.com/researchstore/fintech-payments/online-payment-fraud-research-report
Download the white paper: https://www.juniperresearch.com/whitepapers/fighting-online-payment-fraud-in-2022-beyond
Juniper Research provides research and analytical services to the global high-tech communications industry, providing consulting, analyst reports and industry commentary.