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Digital Identity, Security & Online Fraud

Account fraud grows 113%

Friday 30 December 2016 | 09:20 AM CET

Fraudsters have on new account fraud which has grown 113% according to a white paper form The Electronic Funds Transfer Association (EFTA).

Addressing this roadblock to digital commerce, the paper advocates for more stringent user authentication and discusses how industry stakeholders must push for wider adoption of such measures.

There’s two main parts here. Merchants want to prevent chargebacks by supporting payment transaction verification, while cost-efficiently implementing fraud prevention measures, and customers want a combination of convenience and enhanced protection against transaction fraud and identity theft.

In 2016, fraud and chargeback management accounted for 23% of the operational budgets for ecommerce sellers, and fraud costs added up to 8.6% of their annual revenue. This highlights the fact that 49% of chargeback losses originate from online channels, which is three times the amount of in-person fraud.

As the EMV chip has moved more fraudsters online, industry observers see a rise a rise in others areas of fraud: more fraudulent bot transactions, exploiting security risks in buy online pickup in store transactions, and using same-day shipping so that the crime can be committed ahead of detection times.

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