A new report by Juniper Research has found that retailers are in danger of losing USD 71 billion from CNP (Card-Not-Present) fraud by 2022.
The Online Payment Fraud: Emerging Threats, Key Vertical Strategies & Market Forecasts 2017-2022 report found that merchants do not invest enough in preventing online fraud, saying that the costs are too high. Because of this, many are not prepared to deal with online fraud following the introduction of EMV (chip and signature) payment cards in the US.
The analysis, however, points out that most merchants will receive value for their investment. Consequently, Juniper Research believes that extra effort is needed in educating merchants on the benefits of FDP (fraud detection and prevention).
The research points out that CNP physical goods sales are especially vulnerable to fraud, where loses will reach USD 14.8 billion annually in 2022. In spite of these figures, retailers are unwilling to impose rigorous ID checks on pick-up, fearing that this practice would damage the consumer experience and affect conversion rates.
Finally, the research argues that machine learning will be a key tool in identifying genuine users and combating fraud in 2018. At the same time, the ecommerce market will rely on 3DS 2.0 and biometrics.