Online Fraud Set to Surge in Next 5 Years
May 5, 2016
In the next five years, the value of fraudulent online transactions will balloon from $10.7 billion last year to $25.6 billion in 2020, according to a new report from Juniper Research. E- and m-commerce retailers will be hit particularly hard, the report said, accounting for 65 percent ($16.6 billion) of that total. Online banking will make up another 27 percent of the total value, followed by airline ticketing, which will account for 6 percent.
Regarding fraud against retailers, two key areas stood out to researchers at the U.K.-based payments consultancy. Increased attention to omnichannel initiatives mean more retailers are offering “buy online/pay in-store” options and fraudsters are increasingly taking advantage. More retailers also are offering electronic gift cards and this is another area Juniper identified as a particular problem for e- and m-commerce merchants.
Gareth Owen, the report’s author, reiterated a message with which retailers are very familiar: whatever holes you plug today, fraudsters will adapt and find new ways to attack tomorrow. He cited the airline industry as an example.
“A few larger airlines claim that they have reduced eTicket sales fraud to less than 0.1 percent or 10 basis points of revenues” said Owen. “When thwarted, however, fraudsters quickly move on to easier pickings such as frequent flyer fraud.”