Merchants will lose more than $70 billion globally to card-not-present fraud in the next five years, but many still think fraud prevention is too costly, according to a new report. U.K.-based consultancy Juniper Research found that the ongoing migration to EMV technology in the U.S., a slower-than-expected rollout of 3D Secure 2.0 and a significant vulnerability via click-and-collect fraud are all factors that will drive CNP fraud losses in the next half decade.
Within organizations there can be tension between sales and marketing departments that want to sell a company’s products or service and the fraud department that often is perceived as the people who prevent that. Juniper, however, performed cost analysis on many fraud detection and prevention solutions and found that, in most cases, they provide value and ROI for merchants in the face of rising fraud.
Juniper pointed specifically to pressure that will be felt by physical goods merchants struggling with click-and-collect fraud. As customers demand more convenience and retailers respond with omnichannel alternatives, buying goods online and picking them up at a store location or locker is becoming more popular and, consequently, exposing merchants to more fraud. According to the report, the lack of a residential address associated with this type of sale along with reluctance on the part of merchants to impose stringent ID checks at pick up out of fear it will affect the customer experience will drive click-and-collect fraud to new heights. By 2022, physical goods merchants will lose nearly $15 billion annually with click-and-collect fraud accounting for a significant chunk.