eCommerce Losses to Online Payment Fraud to Exceed $48 Billion in 2023

The total cost of eCommerce fraud to merchants will exceed $48 billion globally in 2023, from just over $41 billion in 2022, according to Juniper Research. The study predicts that this growth will be accelerated by the increasing use of alternative payment methods, such as digital wallets and BNPL (Buy-Now-Pay-Later), which are creating new fraud risks. The report recommended that fraud prevention vendors focus on building platforms providing AI-powered risk-based scoring, which can be payment method agnostic, to best suit changing market conditions.

The research identified North America as having the largest fraudulent transaction value of any regional market, accounting for over 42% of global fraud by value in 2023, despite representing less than 7% of banked individuals globally. The research cited the vast volume of data breaches and the broad availability of stolen credit card information as the key risk factors in this market.

“To combat this fraud, eCommerce merchants must implement simple steps such as address verification, combined with risk-based scoring on transactions, which will allow merchants to best mitigate the massive fraud threats present,“ explained research author Nick Maynard.

Additionally, the research found that the potential for fraud with BNPL is a major risk going forward. Given the delayed nature of BNPL payments, fraudsters can make several illegitimate payments using stolen card details before the fraudulent activity is identified, creating significant risk. In turn, the research recommended that BNPL vendors conduct robust identity verification at the point of onboarding to mitigate these risks.