Sift has announced the release of its COVID-19 and E-Commerce Fraud Tracker, a weekly updating digest of changes in e-commerce and fraud amid the COVID-19 pandemic.
As businesses in nearly every industry across the world have been impacted by the changes in consumer shopping behaviour since the spread of the novel coronavirus, Sift has observed pertinent – and sometimes counter-intuitive trends – in activity and payment fraud rates across its network of over 34,000 sites and apps from around the world.
Some of Sift’s initial findings include:
- Fraudsters are following the money: While online businesses have seen sharp increases in activity across their platforms, the rate of attempted payment fraud (the percentage of fraudulent payments out of total transactions) has increased roughly 50% since early January.
- Consumers are flocking to digital goods: After observing a steady increase in activity across digital e-commerce sites through the beginning of 2020, event volume shot up 23% in this vertical starting in March, when many state and local governments implemented stay-at-home orders. The rates have not caught up with the increased activity, however, Sift has seen a marked increase in total instances of fraud in that vertical.
- Struggling industries deal with insult to injury: Both Ticketing & Events and Travel & Transportation companies have seen plunging transactions on their websites and applications. However, attempted fraud instances have largely remained stable, thus creating sky-high fraud rates. This is particularly troubling as companies whose fraud rates get too high are subject to fines from payment providers, adding additional costs on top of already catastrophic losses.
- In physical e-commerce, fraudsters hope to blend in: Not surprisingly, physical e-commerce, such as when a customer orders groceries online and picks them up in-store, has seen an aggressive 29% increase in event volume – an expected byproduct of social distancing and stay-at-home mandates. Unfortunately, fraud rates in this vertical have also exploded 68%, which could possibly be due to fraudsters’ ability to hide more effectively within higher volumes.
“Since the beginning of the global pandemic, we’ve seen one of the fastest and most dramatic shifts in consumer behaviour in modern history,” says Jason Tan, CEO, Sift. “And while we don’t yet know all of the consequences of these changes, one unfortunate truth is clear: bad actors are looking to take advantage of the crisis in order to steal from consumers and businesses. By paying attention to the trends in our E-Commerce Fraud Tracker and following best practices, merchants can fight fraud and protect their revenues during these turbulent times.”
The Sift E-Commerce Fraud Tracker can be found here and will be updated weekly during the ongoing pandemic.