Juniper Research has found in its latest study that retailers worldwide are expected to lose a monumental amount of $130 Billion between 2018 and 2023 in Card-not-present fraud.
According to the research, as the world of technology is rapidly transforming; operations, processes and systems are evolving to advance levels. The study by Juniper Research states that the technology while evolving in the right direction, might not be doing so in a positive direction. The complex methods being adopted by hackers, and fraudsters can bring a lot of frustration for online retailers. The emerging techniques are the key factors behind increased fraudulent activities. Not only this, but hackers are now seeking to monitise the techniques behind committing fraud and damaging security infrastructure(s).
The current security measures taken up by retailers are easy to cheat. Most of the time focus on while assessing risk by eCommerce merchants is on the originating point of transaction. However, considering the latest tricks and scams pulled it is not of immense importance that the scope of risk assessment be extended to analysis of sessions, behaviours, and additionally validating the identity of a customer. This should be implemented before each transaction can take place.
Steffen Sorrell, lead author on the research said, “A layered FDP solution naturally helps directly preventing fraud, but it also offers major gains in terms of recovering potentially lost revenue through false positives. This is something about which retailers remain undereducated, and has allowed fraudsters to capitalise on relatively low FDP spend,”.
The driving force behind this research study is cited to be Fraud Detection & Prevention industry worth as well as the high costs related to it. Juniper Research revealed that payments systems and online stores will spend approximately $9.6 on annual basis till 2023. The situation is a result of not only pertaining threats but also the mounting regional regulations which require for risk management to be in place.
The research, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2018-2023, that the figures have had an immense fallout as compared to 2015. It says that $22 Billion losses projected for 2018 has been increased by nearly $26 Billion for post 2018.
Normally, the transactions done online are processed via Card Not Present transactions, or wallets like PayPal. However, the world is slowly becoming API driven and creating “banking-as-a-service”. Opportunities like these make the banking world more open and consumer centric. Seeing this a lot of new competitors are entering the market to capitalise on it.
This has lead to an open arena for the fraudsters. With employing latest techniques and tricks they constantly exploit new systems. Based on this UK’s Faster Payments System saw a whopping 132% increase in fraud. The reason being that the system was not prepared enough to fight scam activity.
However, there may already be a solution present to tackle all this. As discussed in another piece with the use of Blockchain technology; which is much more transparent and sophisticated, online retailers can reduce fraudulent activity by a maximum.