Now’s The Time To Guard Against Holiday E-Commerce Fraud
Bruno Farinelli, our Fraud Analytics Manager, discusses how to safeguard ecommerce merchants from the influx of fraud that occurs over the holiday season.
The 2016 holiday season holds promise and threats for e-Commerce retailers. On the positive side, U.S. online retail sales are expected to increase by 17% this year compared to the 2015 holiday season. On the negative side, fraud attempts increased by 8% last year and they’re poised to rise even more this holiday season. The cost of fraud to e-Commerce merchants is on the rise, too. It’s now at an average of 1.47% of revenue. The message from these figures is this: Online retailers who want to make the most of rising holiday sales must plan now to thwart fraudsters while maintaining a good shopping experience for legitimate customers.
E-Commerce Under Threat
The Threatmetrix Cybercrime Report for Q2 of 2016 found that “this quarter saw the highest level of attacks on e-Commerce with more than 69 million rejected transactions, representing a 90% increase over the previous year and a 12% increase over the previous quarter.” Fueling the problem are a migration from point-of-sale to online fraud after last year’s EMV liability shift, a yearlong rising tide of botnet-powered fraud, and a surge in hard-to-detect account-creation fraud using the stolen credentials from data breaches worldwide.
Retailers Must Shore Up Defenses Ahead Of The Holidays
As always, the challenge for e-Commerce retailers is to stop fraud without falsely declining valid orders. The extra challenge during the holidays is maintaining that balance at speed when order volumes spike. To accomplish that, here are fraud-prevention elements to review now, before holiday shopping begins.