E-commerce fraud - statistics & facts
In the past decade, the constant growth of e-commerce sales聽has offered fraudsters unlimited opportunities to take advantage of a market worth over 4 trillion U.S. dollars worldwide. In 2024, losses to online payment fraud were estimated at 44 billion U.S. dollars. While that figure declined in comparison to 2023, it is forecasted to surpass the 100 billion U.S. dollars mark by 2029. In light of this situation, fraud detection and prevention in the e-commerce market is crucial for reducing losses of online shoppers and merchants alike.
Fraud has been around since the origin of e-commerce, however the complexity required to fight it is increasing. The use of technology will remain a vital component for e-commerce sellers hoping to avoid fraud-related losses as fraudsters attempt to utilize it against them.
To trust or not to trust
Fraud attacks come from diverse sources, and affect both online buyers and sellers. Although buyers are frequently impacted by fraudulent sellers, they also engage in e-commerce fraud at high rates. In 2024, e-merchants across the globe reported experiencing more than a dozen of different types of fraud attacks, with refund and policy abuse being the most common. Other fraudulent activities of buyers like coupon/discount abuse was also reported by e-merchants. According to online sellers, the increase of first-party misuse聽happened mainly as a result of increasing sales as well as consumers learning how to 鈥済ame the system鈥. Because potential fraudsters are becoming more knowledgeable every day and e-commerce only continues to grow, it is imperative for online retailers to effectively enhance their prevention measures against these attacks.What鈥檚 next for e-commerce fraud?
E-commerce companies are well aware of the high costs that fraud generates, and they have already introduced measures to fight against attacks. Out of the several measures implemented to prevent e-commerce fraud, two-factor authentication (2FA) and machine learning (ML) solutions were the most efficient methods in 2024. While new technologies like artificial intelligence (AI) and machine learning are being used to combat fraud, fraudsters are still trying to level the playing field by using those same technologies in their favor. In 2024, AI was perceived to increase the sophistication of phishing and online scams globally.Fraud has been around since the origin of e-commerce, however the complexity required to fight it is increasing. The use of technology will remain a vital component for e-commerce sellers hoping to avoid fraud-related losses as fraudsters attempt to utilize it against them.
