As the world has become increasingly digital, and the ease of e-commerce’s click-and-deliver model has transformed consumer behaviour, online fraud has also seen a spike in lockstep. E-commerce frauds have been increasing steadily every year since 1993, according to reports from Nilson, and fraudsters are only getting more sophisticated with every passing day.
Technology has thrown the door open to better techniques of hacking and data breaches that make payment frauds and identity theft commonplace. And that is just the tip of the iceberg.
“Friendly” chargeback frauds, where customers claim a refund even for legitimate transactions, may cost merchants more than $25 billion per annum by this year, as per Chargeback911’s research. The growth of third-party hosting websites has also given rise to triangulation frauds, where a fraudulent seller mediates between a real customer and a real online store to make purchases using stolen cards.
In short, e-commerce frauds are complex. The risk of leaving them unchecked can impact business performance, hinder growth, impact the bottom line, tarnish brand reputation and irreparably affect customer loyalty.