January 17, 2017
By John Stewart
The bill continues to come due for the frenzy of orders online merchants processed over the holidays. While card-not-present transactions were up 16% for the holiday season compared to the same period in 2015, fraud attempts increased fully 31%, according to data released Tuesday by ACI Worldwide, a Naples, Fla.-based processor.
The company drew its data from hundreds of millions of transactions processed for global merchants by its ReD Shield fraud-detection and –prevention service during the time from Thanksgiving through Dec. 31 both years. ReD Shield processed 7% of the volume on Black Friday, the day after Thanksgiving, and 13% of the volume on Cyber Monday, the Monday after Thanksgiving, ACI says. Both days are critical sales days for e-commerce merchants, with a 15% increase in transaction volume on Cyber Monday and a 19% jump on Black Friday year-over-year, according to ACI’s figures.
Fraud attempts were highest on Christmas Eve, shipment cutoff day, and express-shipment cutoff day, ACI says, as fraudsters rushed to beat shipment-cutoff deadlines and take advantage of buy online, pick up in store offers.
All told, the fraud-attempt rate for the 2016 holiday season increased to 1 in 97 transactions from 1 in 109 transactions for the same period the year before. However, the average ticket for an attempted fraudulent transaction dropped 6% to $228 from $243 in 2015.
"Over the 2016 holiday shopping season, merchants experienced significant growth in their digital channels, coupled with a substantial increase in fraud," said Markus Rinderer, senior vice president for platform solutions at ACI, in a statement. "Given the consistent and alarming uptick in fraudulent activity on key dates, merchants must be proactive in their efforts to identify weak points—and define short and long-term strategies for improved security and enhanced customer experience."
Because of the holiday-shopping binge, merchants last week confronted the day on which they are likely to receive the most chargebacks they will see on any single day this year, according to data from Chargebacks 911, a Clearwater, Fla.-based company that helps merchants manage chargebacks and chargeback fraud.
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