It is not entirely surprising to see ecommerce fraud rise significantly in 2020. More people shop online, creating a bigger target for criminals. Addressing these concerns will be very difficult, even under the best of circumstances.
Ecommerce Fraud is Still Rising
As one would come to expect, the rise in online shopping also results in higher fraud rates. Making things more accessible and convenient will always attract attention from criminals. It is something that simply cannot be avoided in this modern day and age.
Unfortunately, the growth in ecommerce fraud is nothing new either. With fraud growing as fast – or sometimes faster – than online sales, the industry has a big problem to address.
Moreover, the number of chargebacks through credit cards continues to rise by roughly 20% every year. Whether this is due to fraudulent purchases, or customers trying to pull a chargeback scam, is a different matter.
Things have gotten so dire that actual ecommerce fraud trends can be identified today. That in itself shows how crafty criminals have gotten. At the same time, it is often difficult for merchants to address these risks. Not an ideal situation by any stretch of the imagination.
Current eCommerce Fraud Trends
Three of the five main ecommerce fraud trends are difficult to protect against as a merchant. Whether it is merchant app fraud, digital payment fraud, or promotion abuse and signup fraud, there is very little a merchant can do about these things.
Especially merchant app fraud is problematic. If a criminal downloads your mobile app to pay for goods and services using stolen payment cards, there is no real recourse. One option is to check purchases manually, but that is almost impossible. Having fraud protection is the only alternative, albeit a rather costly one.
Promotion and signup fraud is very similar. If customers sign up through referral links – and turn out to be accounts used in conjunction with stolen payment cards – the affiliate often keeps the money regardless. The only recourse: terminating a loyalty account, but that won’t always be ideal.
Other types of ecommerce fraud to look out for include compromised business emails and account takeovers. With proper security in place, including two-factor authentication, most of these issues can be avoided. However, criminals are crafty and will often find a way around it.