“Fraud and Security in Global Online Payments 2019” is the title of a new report published by yStats.com, a leading secondary market research company based in Hamburg, Germany. According to this research, online payment fraud losses are projected to double between 2019 and 2023. Emerging technologies such as mobile biometrics, behavioral analytics, blockchain and machine learning are called upon to mitigate the risk of fraud in E-Commerce.
Card not present fraud on the rise worldwide
As retail spending is shifting towards the online channel, the issue of fraud and security in digital payments becomes increasingly important. The volume of online payment fraud losses is growing along with E-Commerce sales and is projected to more than double between 2018 and 2023, according to forecasts cited in the yStats.com report. Card not present fraud is the largest contributor to card payment fraud rates worldwide and is on the rise in the world’s top E-Commerce markets such as the UK, the USA, Japan and Australia.
Security concerns deter shoppers from paying online
Both E-Commerce sellers and online shoppers are wary of online payment fraud, as the yStats.com report reveals. In Asia-Pacific, the world’s largest region by online retail sales, over two-thirds of online shoppers rank security as the top factor that they consider when purchasing on the Internet. Fear of fraud and security prevent many Internet users in the Middle East & Africa from shopping online and lead to a high share of cash on delivery payments among those consumers who do order online. In North America, M-Commerce sellers of digital goods are especially exposed to the high total costs of digital payment fraud, while in Europe, online sellers, banks and payment providers are preparing for the new payment security regulations entering into force from September 2019, which are expected to have a major impact on the region’s E-Commerce payments landscape.
Top technologies for online payment fraud prevention
Emerging technologies are coming to the sellers’ and shoppers’ aid in mitigating the risk of online and mobile payment fraud. Among them, biometrics such as fingerprint and iris recognition technologies are expected to be some of the most effective measures in managing fraud, given the rapid growth of mobile devices enabled with biometrics. Other relevant fraud prevention technologies referenced in the yStats.com report include machine learning and behavioral analytics. Furthermore, the introduction of the new 3D Secure 2.0 protocol is expected to provide higher levels of security and convenience for card not present payments, while also driving compliance with the new regulations in Europe.