There was more fraud experienced by merchants in 2021 than 2020, with new types of fraud affecting 62% of merchants, according to research from Ravelin.
The most prevalent type of fraud continues to be online payment fraud, with 20% more businesses seeing an increase in the area in 2021, according to the survey of more than 1,700 international ecommerce merchant fraud and payment specialists. This increase meant that global ecommerce industry was hit for $20 billion in 2021.
Due to the pandemic, retailers also saw a big increase in policy abuse, with refund abuse rising for 60% of merchants, compared to 51% in 2020. Meanwhile, promo abuse was up for 55% of merchants, versus 49% in 2020, and 46% of merchants – up from 40% in 2020 – saw a rise in friendly, or chargeback, fraud. Digital goods merchants were the worst hit when it came to all three types of abuse. Digital goods and marketplace merchants also suffered the most when it came to account takeover.
“2021 was another turbulent year for ecommerce. Online ecommerce merchants are unfortunately a hot target for fraudsters — both on the buyer side and on the supplier side. Despite the tentative return of in-person buying, ecommerce continued to boom, and it became clear that the digital shift isn’t going anywhere,” said Martin Sweeney, CEO at Ravelin.
“But with rising digital sales came increasing fraud attacks. It’s imperative that businesses invest in fraud teams and budgets in 2022, to create an ecosystem that comprises of fraud detection technology data and human insight to combat new types of fraud attacks fast.”