E-commerce is a booming industry, and 2020 has marked a significant uprise in its popularity. Of course, the convenience it offers is unparalleled. However, at the same time, increased online traffic has also raised the risks of online fraud.
With e-commerce sales estimating over $630 billion in 2020, $16 billion was lost because of fraud. That’s more than 2% of the total business earned by the e-commerce industry. And notably, this data is irrespective of the industry.
According to a database presented by the Crowe UK and Centre for Counter Fraud Studies, 21% of consumers are afraid to use their credit cards online. Credit card users worry that hackers could steal their data. The same report also suggests, 19% of consumers believe their data would be misused.
Consumers prefer other means of payment over online transactions. With over 50% of the consumers facing fraudulent or suspicious actions on the internet, the data is quite distressing. A spokesperson from HPS’s fraud monitoring solution team explains the need for implementing innovative fraud detection and prevention methods. It is also worth mentioning that e-commerce frauds are not limited to online transactions. Statistically speaking, spam calls, door-to-door, postal, or even in-store scams surpass e-commerce frauds.
E-Commerce Fraud Trend Analysis
Frauds have always been common hearsay in commerce and finance. Although, it has been shifting forms through time.
Ever since the number of cash-free transactions has increased, fraud reports for e-commerce have also increased. And the recent pandemic has only propelled it more.
AI-Based E-Commerce Fraud Protection
As the technology is evolving, so are online hackers and spam reports. This has set a trend so far. However, the vast availability of data, both user and fraud, has only made it difficult for security agencies to tackle them. Nonetheless, Artificial Intelligence is here to solve this problem.
Sophisticated AI infrastructure is helping collect and assess data from different sources. Regardless of the size and variation in data, it has become a lot easier to identify the trends. And likewise develop strategies to tackle online frauds.
ML-Based E-Commerce Fraud Protection
Another adaptation to the changing finance dynamics is Machine Learning. Since every financial front, be it a bank or a retailer, uses a different payment method, it becomes imminent to adapt to the market’s changing needs. Besides, there are now sophisticated payment modules to meet every touchpoint.
Machine learning evolves along with the user behavior and creates copies of the same. The data thus collected can further be used to detect fraudulent behavior. And therefore, prevent any financial or personal data loss at the online e-commerce platforms.
Summing It Up
Reports and user surveys indicate that e-commerce businesses need to adapt and prepare for the potential risks. Familiarizing yourself with the tools and solutions to fight them is no longer an option. To make the users feel more relaxed and trust online payments, it is a necessity.
Apart from this, choosing innovative payment methods that are competently curated to improve user experience can further help prevent online fraud.