According to Ravelin, 59% of merchants have seen a huge leap in online payment fraud in the last twelve months. Other merchants reported account takeover (51%), promotion abuse (up 52%), refund abuse (up 53%) and customer fraud/friendly fraud (up 40%).
In response to the growing number of cases, merchants are now expanding fraud teams to mitigate losses.
In the UK, over half (58%) of online businesses polled plan to grow their fraud teams in the next year. Everywhere else the world, the trend is even more pronounced, with 80% of merchants in Germany, 72% in the US, and 86% in Australia expecting teams to grow in size.
Ravelin CEO Martin Sweeney commented on the results: “Over the years merchants have built up fraud investigation teams which they’re justifiably proud of. But fraud continues to grow and mutate: simply throwing more people and money at the problem won’t make it go away. Losses will continue to grow.
“Businesses need to get on the front foot managing fraud: using automation to nip fraudulent transactions in the bud”, Sweeney added. “Better automation helps teams scale and frees up fraud investigators from mundane tasks enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth. With the economy in an uncertain place, enabling growth must become the priority.”
The Covid-19 pandemic has had a galvanizing effect on the e-commerce sector, which led to a soar in profits but also increased pressure from online fraud.
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By GlobalDataAccording to a report published by GlobalData in April 2021, 48% of consumers considered convenience the most important factor when shopping online. Only 26% said they would treat security as the most important feature when buying goods online.
Ravelin is a machine learning fraud platform. In October 2022, the company partnered with Mastercard to develop a fraud prevention solution for quick commerce merchants.
Ravelin’s survey also looks at the increase of ‘newer’ types of fraud prevalent globally. One such type involves policy abuse, experienced by 40% of businesses.
The survey on e-commerce fraud involved over 1,900 global fraud professionals working for online merchant businesses with over $50m in annual revenue.
