A new study has found that merchant losses to e-commerce payment fraud will exceed $25 billion in 2024, from just of $17 billion in 2020, despite the ongoing implementation of SCA (Secure Customer Authentication) in Europe.
The research found that the popularity of e-commerce and increased card-present security with the introduction of EMV, have made e-commerce payments a compelling target for fraudsters. The research highlighted that e-commerce merchants outside Europe must adopt similar measures to SCA, including two-factor authentication, or they will suffer from increasing levels of sophisticated fraud. Payment gateways will be vital to ensure that these security requirements are implemented at scale.
Cybersecurity & Human Element Crucial to Securing E-commerce
The new research observed that as well as implementing further payment security measures, eCommerce merchants must take on a more educational role for their users. This role will primarily be education about cybersecurity practices, common fraud methods and changes to the checkout process to improve fraud mitigation. This will be essential in China, which will account for 42% of all e-commerce payment fraud in 2024.
Anti-fraud Measures Must Not Increase Friction
The research also identified that while additional security measures, including two-factor authentication, must become more widespread, merchants must be careful when implementing these changes. Increased friction in the checkout experience must be minimised, or merchants will face increased cart abandonment rates. It is recommended that security vendors work with merchants to build security measures into shopping apps that ensure a low-friction user journey, whilst encompassing increased authentication requirements.
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