New Study Shows 79 Percent of Online Merchants See Fraud as the Dark Cloud Hovering Over a Bright Sales Vista
Worldpay, a payment processing company that provides payment services for mail order and Internet retailers, as well as point of sale transactions, just released its Fragmentation of Fraud report. The report shows that fully half of all online merchants polled find it difficult to keep up with fraud trends with only 20 percent confident in their ability to handle those threats.
The following has been excerpted from the finextra.com article highlighting key points in the fraud report and edited to fit our format. You may find the full unedited article by clicking on this link.
International online merchants sell to an average of 14 countries, yet 70% admit they struggle to keep ahead of fraudulent activities within those different markets. With three quarters (76%) of online merchants stating that they expect international orders to make up a greater proportion of their customer orders in two years’ time, these issues are only set to intensify.
More payment methods more risk
[The] greater [the] variety of payment methods [the greater the risk of fraud]. 63% are struggling to keep ahead of fraudulent activities across different payment methods.
[For] merchants accepting [different] payment methods, [fraud concerns] are: credit cards (82%), virtual currencies (82%), e-wallets (78%) and mobile payments (75%).
Not enough resources
[Merchants] are concerned they do not have the resources to manage fraud effectively. The main barriers to being able to reduce fraudulent orders are not having a dedicated omni-channel fraud and loss prevention method (57%) and lack of time to investigate and implement methods that could better manage fraud (49%). 82% also feel that a partnership approach with a fraud expert is critical to keeping ahead of threats.
A little fraud costs a lot of money
Worldpay data shows that, on average merchants can reject up to 2.6% of transactions because of fraud. To a merchant with an annual turnover of $50 million that’s a loss of $1.3 million.
What is keeping online merchants up at night?
Merchants feel the key challenges when it comes to identifying and preventing fraud are:
- The growth of mobile payments – 70%
- Purchases from particular countries – 65%
- The number of channels they use to sell – 60%
- The number of countries operated in / sold to – 58%
- The growth of ewallets – 54%
ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.
ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.
The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.
For more information, visit www.threatmetrix.com or call 1-408-200-5755.