BASINGSTOKE, U.K.–A new study from Juniper Research has found that the value of losses due to eCommerce fraud will grow 18% in just one year to $20 billion in 2021, up from $17.5 billion in 2020.
The research found fraudsters have targeted consumers as they have increased their eCommerce use, exposing insecure fraud mitigation processes from merchants who are unfamiliar and unprepared for the continuing fraud challenges in this market.
The research identified that merchants need to do more to implement fraud prevention strategies across all of their eCommerce channels, or they will continue to experience large losses. The use of AI will enable behavioral biometrics in this area, which will increase security across all potential fraud channels, according to Juniper.
Hesitation by Merchants
The new research, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2021-2025 Market Research, found that while merchants will be keen to reduce fraud rates from their current levels, they will be hesitant to introduce extra friction into the checkout process.
Juniper noted the report further identified that clear messaging around security checks and automated behavioral analytics leveraging AI are key capabilities in preserving the user experience.
“While the need for security is greater than ever, the competitive eCommerce environment means merchants will need to ensure that extra security checks are justified to the user, or they risk higher cart abandonment rates,” said research co-author Susan Morrow.
China Single Largest eCommerce Fraud Market
The research further found China will be the largest single eCommerce fraud market in the world; accounting for over 40% of eCommerce fraud losses globally in 2025, at over $12 billion.
“The research identified a massive eCommerce market and a relative lack of fraud detection and prevention platform deployment as the key drivers behind this,” Juniper said. “The research recommends that merchants operating in China should invest in fraud detection and prevention now, or they will increasingly face damage to their already slim operating margins.”