Juniper Research predicts 16% growth in e-commerce fraud losses next year
A new study from Juniper Research has found that e-Commerce merchants will lose over $48 billion globally to online fraudsters in 2023, a 16% growth from just over $41 billion in 2022.
The research predicted that this surge will be accelerated by the increasing use of alternative payment methods creating new fraud risks. Those include digital wallets and BNPL (Buy-Now-Pay-Later).
Therefore, the report recommended fraud prevention vendors to focus on building AI-powered risk-based scoring platforms. They can be payment method agnostic, to best suit changing market conditions.
North America Tops the Fraud Rating
In addition, Juniper Research conducted a regional analysis of the online fraud spread. It discovered North America had the largest fraudulent transaction value, accounting for over 42% of global fraud in 2023. At the same time, the region represents less than 7% of banked individuals globally. The vast volume of data breaches and the broad availability of stolen credit card information are the key risk factors in this market.
BNPL Fraud is a Major Risk
Finally, the research found that the potential of BNPL-related fraud is a major risk for e-commerce. Considering the delayed nature of BNPL payments, fraudsters can make several illegitimate payments using stolen card details before the fraudulent activity is identified. Therefore, the research recommended that BNPL vendors conduct robust identity verification at the onboarding stage to mitigate these significant risks.