New research from fraud prevention company Ravelin finds that new solutions are desperately needed as businesses struggle to address spiralling e-commerce fraud.
In the last twelve months, merchants have seen a huge leap in online payment fraud (up 59%), account takeover (up 51%), promotion abuse (up 52%), refund abuse (up 53%) and customer fraud / friendly fraud (up 40%).
GlobalData analysis finds that account-to-account payments occurring through peer-to-peer or e-commerce transactions cause security risks for attacks on social engineering, with the only real preventative being customer education.
What actions are retailers taking against fraud?
Merchants are now throwing more and more money at the crisis and expanding fraud teams in a bid to mitigate losses.
Three-quarters (75%) of all online merchants say fraud budgets will grow this year (global average figure.) In the UK 62% will be spending more on managing fraud. This rises to 70% in France, 74% in Germany, 69% in the US and 84% in Canada.
In the UK over half (58%) of online businesses polled plan to grow their fraud teams in the next twelve months. In other parts of the world, the trend is even more pronounced. Ravelin has found 80%of merchants in Germany 80%, 72% in the US and 86% in Australia expect teams to grow in size.
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When it comes to tools for tackling fraud most businesses (78%) opt for in-house solutions, which are expensive to maintain and quickly become unsustainable as a business grows. In the UK the figure is 80%, in France it’s 81% and in Germany its 77%.
Policies undertaken for security and safety concerns related to fraud will improve relationships between retailers and consumers and enhance customer loyalty, but only if performed efficiently.
Ravelin CEO Martin Sweeney said: “Over the years merchants have built up fraud investigation teams which they’re justifiably proud of. But e-commerce fraud continues to grow and mutate. Businesses need to use automation to nip fraudulent transactions in the bud.”