ePayments provider Ingenico published a report titled ‘Global Online Fraud Panorama’. The report covers key trends in online fraud in the global eCommerce industry.
Global eCommerce sales have increased in 2015 by 13.5% versus the previous year, totalling USD 1.7 trillion. This year, global eCommerce sales are expected to increase further to reach USD 1.92 trillion in total sales. Consumers in emerging markets, the increased use of mCommerce, new payment options and improved global shipping are the primary drivers behind this growth.
However, the eCommerce industry also faces an increase in online payment fraud to the extent where it has become an accepted part of the eCommerce industry. According to Ingenico’s report, online fraud can cost merchants an estimated 0.3% to 3.0% of annual revenue.
Fraud chargeback rates vary per industry. Software (0.66%), Financial Services (0.65%), Media & eContent (0.57%), Retail (0.50%) and Travel (0.50%) have been the industries with the highest fraud chargeback rates last year. While in industries, such as airlines, where fraud is more prevalent, the number of chargebacks has actually gone down in recent years, due to an increase in fraud protection measures. However, these figures spiked again last year from 0.31 to 0.50%.
Fraud chargebacks also vary from country to country and order size. The higher the order amount the higher the fraud chargeback rate. Countries that rank highest in online payments fraud, measured by their percentage of fraud chargebacks, are Brazil (3.55%), Mexico (2.82%) and Russia (0.82%).
A popular way for merchants to combat ePayments fraud is through the use of 3-D Secure authentication. The 3-D Secure adoption rate has increased globally and stood at 22% in 2015.
To read the full report, click here.