Payments companies and retailers have a sobering forecast to ponder for online fraud. By 2023, global online fraud losses from e-commerce, airline ticketing, money transfer, and banking services will grow from $22 billion projected in 2018 to $48 billion, says Juniper Research in a new report.
Thanks to the proliferation of synthetic identities—when fragments of real identity information is used to create a new identity—and account takeovers, criminals are increasingly skirting anti-fraud measures retailers and payments companies use, Juniper says.
“Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioral giveaways that indicate this type of fraud. Fraud-management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up,” noted research author Steffen Sorrell in the “Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2018-2023” report.
In an accompanying white paper, “Future Fraud-3 Dynamics Changing Fraud in 2019,” Juniper says it’s “not surprising that as e-commerce transactions grow [year-over-year], so do the number of fraudulent transactions.” Criminals are attempting to leverage peak shopping periods as a way to obscure their activities, the white paper says, referencing data from ACI Worldwide that shows fraudulent activity outpacing the growth of overall e-commerce transactions.
“Such a high volume of transactions running through merchant systems leaves little or no time for manual reviews unless merchants are willing to accept lost revenue,” the white paper says.