August 24, 2016
CyberSource Survey: E-commerce Fraud Rate Drops, Dollar Losses Up
Feb. 2, 2012
Anti-fraud technology provider CyberSource said the fraud rate by order (the percentage of orders that turned out to be fraudulent) dropped from 0.9 percent in 2010 to 0.6 percent in 2011—the lowest in the 13-year history of its annual survey of e-commerce fraud. Visa-owned CyberSource said merchants are making gains against fraud but the cost of fighting it continues to grow. Dollar losses were up, manual reviews continued to climb and merchants reiterated their concern that fraud is becoming more difficult to detect, the survey found. “The bad news is that fraudsters took in a higher dollar volume, the first such increase we’ve seen since 2008,” said Andrew Naumann, CyberSource senior business leader, Fraud Management Solutions. “Our study shows merchants are working harder than ever to keep fraud in check, using more tools and reviewing more orders. Clearly the criminal element is growing more sophisticated.” The survey also found 27 percent of merchants have made investments in true m-commerce channels (accept orders from a mobile app or mobile optimized browser). In addition, on average, merchants say 1 percent of online revenues were lost to fraud in 2011, a slight increase over last year’s 0.9 percent. That translates to an estimated 2011 merchant dollar loss of approximately $3.4 billion. This is the first time merchants have cited an increase in the fraud rate by revenue since 2004.