With the 2015 Holiday season behind us, payments processor ACI Worldwide collected the data to analyze the percentage of fraudulent transactions that took place during the bustle of holiday shopping. According to their data, in-store pick up was responsible for fraud spikes. However, this was accompanied by a growth of e-commerce transactions that outpaced the number of overall fraudulent transactions.
In fact, of the hundreds of millions of transactions that took place during the 2014 and 2015 holiday seasons, online transactions grew from 21 percent from last year while fraud grew 8 percent. ACI’s report also revealed that fraud attempt rates spiked to their highest on Christmas Eve (2.4 percent). Other spikes included Thanksgiving (2 percent), Black Friday (1.8 percent) and all holiday-shipment cutoff days (1.6 percent).
According to ACI, “It saw two trends that could have driven spikes on Christmas Eve: the popularity of electronic gift cards as a last-minute gift and an increase in the ability to buy online and pick up in-store”.
It would seem that electronic gift cards were a big favorite for fraudsters, with the highest fraud attempt rate of any product sold by merchants. In addition, online/pickup in-store had the highest fraud attempt rate of any delivery method. While these targets were anticipated, the fraud numbers related to in-store pick up were not – they exceeded all expectations. In November, the expected increase was 28 percent for fraud attempts for online/in-store pick up transactions. In reality, the fraud attempt on this delivery method increased by 47 percent.
With the shift to EMV cards still underway in the U.S., e-commerce merchants and customers are at an ever-increasing risk. While card-present transactions will be more secure, card-not-present transactions are experiencing an increase in fraud. For e-commerce merchants concerned about this growing threat, securing payment processing services through a provider that will help protect their business and its customers is absolutely crucial. But not all providers are willing to work with high chargeback rates and high risk industries.
With a high risk specialist – like EMB – even the most “high risk” businesses can secure a high risk merchant account. The advantage is that merchants can arm themselves and protect their customers by becoming more proactive in the chargeback process. EMB’s Chargeback Shield program notifies a merchant immediately when a chargeback occurs. In fact, this program has reduced the frequency of chargebacks by 15-30%. To learn more about what a high risk merchant account can do for you, contact EMerchantBroker.com today.