LOOK: This is the Predicted Amount Merchants Can Lose to Online Payment Fraud
The prediction made by a UK study covers eight key regions and 60 countries, including the Philippines. We delve into the issue and what can be done to prevent such losses.
It has been estimated that e-commerce lost $41 billion (approximately PHP 2.72 trillion) to online payment fraud in 2022 alone. Now, that number is projected to increase—not just this year, but all the way until 2028.
A study by Juniper Research, which is based in the United Kingdom, predicts that merchant losses due to online payment fraud will reach $362 billion (approximately PHP 20 trillion) globally from 2023 to 2028. The study likewise predicts a loss of $38 billion in 2023 (approximately PHP 2.10 trillion) and $91 billion (approximately PHP 5.04 trillion) in 2028 alone.
The Juniper Research forecast included the following examples of where fraudulent transactions can occur in its analysis:
- Airline eTicketing
- Digital banking
- Money Transfer
- Remote digital goods
- Remote physical goods
Top Fraud Detection and Prevention Vendors
The Juniper Research report, which is named “Online Payment Fraud: Market Forecasts, Emerging Threats & Segment Analysis 2023-2028” also named its top fraud detection and prevention vendors for 2023. These include financial services corporation Visa, payment systems firm ACI, and data and analytics firm LexisNexis Risk Solutions.
According to the report, vendors have to “utilize data collected throughout the e-commerce process to further develop their fraud detection and prevention solutions through training and advancing AI models.”
“Fraud detection and prevention providers must educate their clients in the importance of data sharing, in order for the highest accuracy within their solutions,” research author Cara Malone said in a statement.
How Companies Can Protect Themselves From Fraud
While having the right software and security policies can greatly help companies from falling victim to online payment fraud, these can be very costly for businesses. However, there are some practical, easy steps that can be taken as well in order for a business to protect itself.
One of which is to watch out for warning signs that a customer is actually fraudulent. Companies should be vigilant in checking if the information they are receiving from a client is legitimate and truthful. A fraudulent customer will key in wrong information or even try to masquerade as someone else.
Companies should also be cautious when making payment and delivery arrangements with the client. It is best to stick with company policies regarding such matters as legitimate clients will respect them.
At the end of the day, there will be countless people out there hoping to outsmart businesses by engaging in online payment fraud schemes. It is up to the companies themselves to be vigilant and take the necessary measures in order to keep themselves safe.