A new study forecasts that merchant losses from online payment fraud is growing dramatically, and will more than double over the next five years, rising from US$38 billion in 2023 to $91 billion in 2028.
Juniper Research pinpoints the rise in eCommerce transactions in emerging markets as driving this growth, where merchants are facing new threats such as the increased use of Artificial Intelligence in attacks. That is, the convenience of online payments is driving growth but it has also created an ever-increasing and constantly moving threat landscape.
The top five vendors for 2023, in order, are LexisNexis Risk Solutions, Experian, ACI Worldwide, Visa and FICO.
The research found that the leading players scored well based on the breadth of their anti-fraud orchestration capabilities, as well as their use of Artificial Intelligence for analysing trends in fraudster behaviour.
As Juniper’s blog noted recently, “As in any other industry, disruption has the potential to be a force for good; it opens up opportunities through innovation. However, payments involve a complex web of interactions and APIs, which while creating opportunities for stakeholders, must now be a consideration in fraud terms. The identity network is also a driving force that, used well, can build trust, but also adds into this heady mix opportunities for fraud”
According to the report, for vendors to stay ahead of the competition, they must utilise data collected throughout the whole eCommerce process to further develop their fraud detection and prevention solutions through training and advancing AI models. The author of the report, Cara Malone said “Fraud detection and prevention providers must educate their clients in the importance of data sharing, in order for the highest accuracy within their solutions.
“This is increasingly important with the growing use of AI, as it utilises a variety of data to examine patterns within fraud, which is extremely advantageous in a space where fraudsters usually attack at scale, rather than attacking a specific customer.”
The full report is entitled Online Payment Fraud: Market Forecasts, Emerging Threats & Segment Analysis 2023-2028, and costs US$4,332 (€4,373, £3,750), however a free downloadable Whitepaper entitled “Combatting Online Payment Fraud” is available here.
The whitepaper examines key challenges within the online payment fraud sector, including the current economic crisis across many developed regions, the growing number of SMEs and their need to access robust fraud prevention systems, as well as the lack of data sharing within the online payment fraud space.
