A new study from Juniper Research has found that eCommerce merchant losses to online payment fraud will exceed $25 billion in 2024, from just of $17 billion in 2020, despite the ongoing implementation of SCA (Secure Customer Authentication) in Europe.
The new research, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2020-2024, found that the popularity of eCommerce and increased card-present security with the introduction of EMV, have made eCommerce payments a compelling target for fraudsters.
E-commerce merchants outside Europe must adopt similar measures to SCA, including two-factor authentication, or they will suffer from increasing levels of sophisticated fraud. Payment gateways will be vital to ensure that these security requirements are implemented at scale.
Cybersecurity & human element crucial to securing e-commerce
The new research observed that as well as implementing further payment security measures, e-commerce merchants must take on a more educational role for their users.
This role will primarily be education about cybersecurity practices, common fraud methods and changes to the checkout process to improve fraud mitigation.
Virtual event platform Hubilo gets £17M funding, plans expansion in the UK
This will be essential in China, which will account for 42% of all eCommerce payment fraud in 2024.
Research co-author Nick Maynard explained: “The explosion of e-commerce means that fraudsters have evolved their tactics, and so merchants must also evolve.
“E-commerce merchants must educate their users in anti-fraud best practice, as the human element is consistently the most vulnerable to exploitation in the online payments ecosystem”.
Anti-fraud measures must not increase friction
The research also identified that while additional security measures, including two-factor authentication, must become more widespread, merchants must be careful when implementing these changes.
Increased friction in the checkout experience must be minimised, or merchants will face increased cart abandonment rates. Juniper Research recommends that security vendors work with merchants to build security measures into shopping apps that ensure a low-friction user journey, whilst encompassing increased authentication requirements.