In 2016, 15.4 million Americans were hit by online financial fraud, which was a 16% increase to $16 billion in stolen money. The fact that there was $1-billion climb from 2015 indicates that this type of fraud isn’t going to disappear soon, especially with the surging popularity of online shopping.
What Do Numbers Show?
According to pymnts.com, ecommerce fraud has gone down 35% since 2016. The increased use of machine learning was found to be one of the basic factors helping to reduce fraud across most industries. This doesn’t refer to department stores and jewelry stores. According to Radial, there’s a 55% growth in fraudulent activity through the last 12 months.
Based on the 2017 American Express Digital Payments Survey:
- 37% of consumers abandoned an online purchase because they weren’t sure the transactions were secure
- 47% of consumers increased their ecommerce purchasing frequency in 2016
- Of over 1.000 consumers surveyed, 70% used a digital-payment service, such as a mobile wallet, one-click checkout button, or a person-to-person payment app
- 41% always or sometimes use one of these digital-payments services when making payments
According to the Census Bureau of the U.S. Department of Commerce, in the 1st quarter, US ecommerce sales made up $105.7 billion, which is a 14.7% increase from the 2016 1st quarter. 81% of merchants consider online and mobile commerce as the biggest growth opportunity for their businesses.
Merchants spent 31% of their information-technology budgets on payments security in the past year, with 54% planning to invest more in 2018.
Of 71% of merchants having experienced increases in online and mobile sales in 2016, 58% state enhanced security features they used significantly accounted for sales increase.
It’s highly important for merchants to turn to a secure and reliable merchant services provider like emerchantbroker.com for an ecommerce merchant account. EMB is voted the #1 high risk payment processor in the US and boasts an A+ rating with the BBB. EMB offers the lowest possible rates in the industry and helps merchants fight fraud without difficulty. EMB is rated A by Card Payment Options and is named one of Inc. 500’s Fastest Growing Companies of 2016.
According to Mike Matan, AmEx vice president of industry engagement, product and marketing, a multilayered approach should be applied to fighting fraud, meaning fraud detection technology should be used or consumers should be required to enter a card verification code. One of AmEx’s services uses machine-learning algorithms to make a fraud-risk decision on AmEx transactions within two milliseconds.
Matan further notes that merchants can provide additional security measures. They can consider setting up security questions, a one-time password, or require customers to create a profile to complete a purchase.