A new report called, ‘Online Payment Fraud: Key Vertical Strategies & Management 2016-2020,’ shows that online fraudulent activity trends are following those seen in Europe a few years ago. Recent PIN and CHIP services at the POS (Point of Sale) locations in the United States, have driven fraudsters from stores to the CNP (Card Not Present) space at accelerated rates. The report predicts that online fraudulent transactions will reach almost $25.6 billion in 4 years. This means that by 2020, $4 out of every $1,000 will be fraudulent.
The report projects that eRetail will constitute 65% ($16 billion) of all online fraud, banking will make up 27% ($6.9 billion), followed by airline ticketing at 6% ($1.5 billion). If fraudster migration trends continue at the current pace, online retailers, banks and travelling agencies will need to take aggressive fraud prevention measures to protect their assets and customers.
Right now, many banks are using anti-fraud technologies like device fingerprinting and 3D-Secure to combat fraudsters. Airlines have also launched sophisticated Fraud Detection and Prevention (FDP) systems that have significantly reduced fraud. But these measures are only temporary fixes and can only divert fraudulent activities to less secure areas. The report highlights these instances. For example, some airlines have managed to reduce eTicket sales fraud by10 basis points of revenue (0.1%). However, when fraudsters fail to make an eTicket purchase, they move to easier areas like frequent flyer fraud.
Online merchants must use permanent and effective merchant chargeback protection to increase their profits and prevent chargebacks due to online fraud. As more consumers use the internet to make purchases, the chances that they will be victims of online fraud drastically increase. Only diligent fraud prevention will protect your reputation, profits, and customer information.
Online payment processors like, eMerchantBroker.com offer Chargeback Shield, a specialty chargeback suite that tracks, monitors, and alerts merchants once a chargeback occurs. Partnerships with Cardholder Dispute Resolution Network (CDRN), Ethoca alert system and Verifi has reduced EMB merchant chargebacks by 15-30%. Let competent merchant account protection keep your customers safe and profits growing. Apply for a merchant account with EMB today and get chargeback coverage right away.