E-commerce Fraud Losses to Surpass $20B in 2021, Report Finds
According to a study by Juniper Research, ecommerce fraud losses are going to rise from $17.5 billion in 2020 to more than $20 billion this year— an increase of 18% over the course of 12 months.
The Covid-19 pandemic has not only caused a surge in ecommerce shopping and online transactions, but also e commerce frauds activities.
Research suggest that one of the main reason so many consumers are falling victims to online frauds is because merchants are poorly equipped to deal with the rising fraud challenges in the market.
An effective approach at dodging fraudulent activities happening online is through implementing cybersecurity measures and scam prevention strategies across all ecommerce channels.
Implementing AI across all ecommerce platforms can work as a strong security measure; behavioral biometrics in this area can also mitigate online scams to a great extent.
Increased security must not involve increased friction
As per the research findings, though merchants would consider measures to reduce scam rates in the industry, they would still be reluctant in introducing extra friction in the checkout process.
It was also identified by the report that automated behavioral analytics leveraging AI and clear messaging around security checks can prove to be two of the most effective measures for improving user experience.
Susan Morrow, Research co-author, said, “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.”
China would be the largest market for e-commerce fraud
Furthermore, the research claimed that most of the online scammy e-commerce activities in the market would take place in China; accounting for more than 40% of ecommerce fraud losses globally in 2025, at over $12 billion.
The research suggests that in order to cope up with the rising fraud-risk, merchants in China should start investing in strong security and anti-fraud measures now, or they’ll have to face serious damages in the coming time.