eCommerce Losses to Online Payment Fraud to Exceed $20 Billion in 2021

eCommerce Losses to Online Payment Fraud to Exceed $20 Billion in 2021
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The value of losses due to eCommerce fraud will rise this year, from $17.5 billion in 2020 to over $20 billion by 2021; a growth of 18% over a single year, according to Juniper Research. Fraudsters have targeted consumers as they have increased their eCommerce use; exposing insecure fraud mitigation processes from merchants who are unfamiliar and unprepared for the continuing fraud challenges in this market.

The research identified that merchants need to do more to implement fraud prevention strategies across all of their eCommerce channels, or they will continue to experience large losses. The use of AI will enable behavioural biometrics in this area, which will increase security across all potential fraud channels.

The new research found that while merchants will be keen to reduce fraud rates from their current levels, they will be hesitant to introduce extra friction into the checkout process. The report identified that clear messaging around security checks and automated behavioural analytics leveraging AI are key capabilities in preserving the user experience.

“While the need for security is greater than ever, the competitive eCommerce environment means merchants will need to ensure that extra security checks are justified to the user, or they risk higher cart abandonment rates,“ said research co-author Susan Morrow.

China will be the largest single eCommerce fraud market in the world; accounting for over 40% of eCommerce fraud losses globally in 2025, at over $12 billion. The research identified a massive eCommerce market and a relative lack of fraud detection and prevention platform deployment as the key drivers behind this.