New Delhi: The total cost of e-commerce fraud to merchants is predicted to exceed $48 billion globally in 2023 from just over $41 billion in 2022, driven by the rise in the use of digital wallets, according to a report released on Wednesday.
The development of alternative payment methods like digital wallets and BNPL (buy-now-pay-later), which are raising new fraud threats, may hasten this increase.
A new record was set in August for the Unified Payments Interface (UPI) in India, with 6.57 billion transactions totaling Rs 10.72 trillion.
UPI recorded over 30 billion transactions worth Rs 51.74 trillion in FY23 (until August).
Losses from sales of physical items, digital goods, money transfer transactions, banking, and other purchases like plane tickets are all included in online payment fraud.
Phishing, business email hacks, and socially engineered fraud are some examples of fraudster attacks.
“To combat this fraud, e-commerce merchants must implement simple steps such as address verification, combined with risk-based scoring on transactions, which will allow merchants to best mitigate the massive fraud threats present,” suggested research author Nick Maynard.
In order to better adapt to shifting market conditions, the report advised fraud prevention suppliers to concentrate on developing systems that offer AI-powered risk-based scoring that can be payment method agnostic.
The analysis also revealed that there is a significant possibility of fraud with BNPL in the future.
Due to the delayed nature of BNPL payments, there is a substantial chance that fraudsters would use stolen card information to make many unauthorised payments before the fraudulent activity is discovered.
