Ravelin has found that more and more digital retailers are increasing budgets to counter e-commerce fraud
E-commerce fraud is growing fast and financially impacting businesses across the globe, according to new research from Ravelin.
In the last twelve months, merchants have seen a huge leap in online payment fraud (up 59 percent), account takeover (up 51 percent), promotion abuse (up 52 percent), refund abuse (up 53 percent) and customer fraud, or friendly fraud, (up 40 percent).
In response, businesses are now throwing even more money at the crisis and expanding fraud teams in a bid to mitigate losses.
Three-quarters of all online merchants say fraud budgets will grow this year. In the UK, 62 percent will be spending more on managing fraud. This rises to 70 percent in France, 74 percent in Germany, and 84 percent in Canada.
In the UK over half of online businesses polled plan to grow their fraud teams in the next twelve months. In other parts of the world, the trend is even more pronounced. Eighty percent of merchants in Germany and 86 percent in Australia expect teams to grow size, Ravelin has found.
However, when it comes to tools for tackling fraud most businesses opt for in-house solutions, which are expensive to maintain and quickly become unsustainable as a business grows. In the UK the figure is 80 percent, whilst similarly in France it’s 81 percent.
Ravelin CEO, Martin Sweeney said: “Over the years merchants have built up fraud investigation teams which they’re justifiably proud of. But fraud continues to grow and mutate; simply throwing more people and money at the problem won’t help.
“Businesses need to get on the front foot managing fraud: using automation to nip fraudulent transactions in the bud. Better automation helps teams scale and frees up fraud investigators from mundane tasks enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth.”