According to CardNotPresent:
“Merchants will lose more than $70 billion globally to card-not-present fraud in the next five years, but many still think fraud prevention is too costly, according to a new report. U.K.-based consultancy Juniper Research found that the ongoing migration to EMV technology in the U.S., a slower-than-expected rollout of 3D Secure 2.0, and a significant vulnerability via click-and-collect fraud are all factors that will drive CNP fraud losses in the next half decade.”
Many companies find it hard to quantify the true threat of e-commerce fraud. Even when they do have accurate metrics, there can be additional issues.
For example, there can be additional issues such as the tension that can sometimes occur within an organization between sales and marketing and the fraud department. As the article goes on to discuss, it’s clearly the job of the Sales and Marketing departments to sell a company’s products or service, but they often perceive that their fraud department is trying to prevent sales. Of course, cost analysis of many fraud detection and prevention solutions have found that, in most cases, these solutions provide significant value and ROI for merchants in the face of undeniably rising fraud.
Juniper’s report also noted the pressure that will be felt by physical goods merchants struggling with click-and-collect fraud. “As customers demand more convenience and retailers respond with omnichannel alternatives, buying goods online and picking them up at a store location or locker is becoming more popular and, consequently, exposing merchants to more fraud.”
The lack of a residential address associated with this type of sale along with the disinclination of merchants to impose stringent ID checks at pick up, lessening the customer experience, “will drive click-and-collect fraud to new heights,” according to the report. The report also states that by 2022, physical goods merchants will lose nearly $15 billion annually, with click-and-collect fraud accounting for a significant chunk.
What’s a merchant to do?
The most obvious answer for e-commerce merchants is to have an effective, automated fraud prevention solution in place. Regardless of how customers are receiving their order (i.e., through to mail or via an in-store pickup) careful screening of purchases when they’re made and flagging those that appear to be suspicious is standard operating procedure for any company that is serious about minimizing fraud.
An automated fraud solution eliminates the need to manually review orders, except for those that are flagged by the system, which is much more efficient and cost-effective. It also provides companies with the confidence to accept more orders, knowing that they have a fraud solution in place that can identify those that may be problematic—making both sales and fraud prevention teams happy.
Recurly knows how much money e-commerce businesses can lose from fraud—both from accepting orders that are fraudulent which often results in chargebacks and from denying legitimate orders on the mistaken belief that they may be fraudulent. We want to help our customers fight fraud and accept more orders—and we offer an integrated, comprehensive, and highly effective fraud prevention solution that will do just that!
To learn more, visit our website.