‘Fragmentation of Fraud’ Challenges Online Merchants
Nearly four in five online merchants believe the growing proliferation of markets, purchasing channels and payment methods pose a significant challenge for effectively dealing with fraud, according to Worldpay.
In its just-published
‘Fragmentation of Fraud’
report the global payments specialist reveals that only one in five online merchants stated they are very confident about their ability to manage new fraud threats and half find it difficult to keep up with fraud trends.
Worldpay bases its findings on 274 conducted among those responsible for online fraud management in international merchants with US$50m+ annual turnover or equivalent, based in the UK, US, China, Russia, Japan and India.
“What is clear is that in this ever-changing electronic commerce [e-commerce] landscape fraud is becoming more difficult for online merchants to manage,” said Kevin Dallas, chief product and marketing officer, Worldpay e-commerce.
“As merchants continue to expand their cross-border operations, sell through more channels and offer more payment methods to meet local customer needs, keeping abreast of new fraud threats is becoming increasingly challenging.”
The survey also found that 73% of online merchants polled plan to operate through new channels in the next two-three years. However, 77% believe that a multi-channel approach makes fraud prevention more difficult and 76% feel it makes them more open to fraud attacks.
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 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, the report suggests.
More payment methods
As alternative payments continue to grow in popularity the greater variety of payment methods merchants offer is also seen as a risk to fraud prevention, with 63% struggling to keep ahead of fraudulent activities across different payment methods. Among merchants accepting specific payment methods, there is greatest concern about fraud for credit cards (82%), virtual currencies (82%), e-wallets (78%) and mobile payments (75%).
With the threat of fraud likely to increase, 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%), while 82% also feel that a partnership approach with a fraud expert is critical to keeping ahead of threats.
The full report can be downloaded at www.worldpay.com/global/insight-reports/fragmentation-fraud-report