New research from fintech and payment markets experts Juniper Research has revealed the startling speed at which online eCommerce fraud is growing, despite already costing business as much as US$44 billion per year.
Juniper predicts those costs will rise by 141% over the next five years, reaching US$107 billion by 2029.
Artificial Intelligence (AI) is fuelling incidences of fraud, enabling more sophisticated attacks with the use of deepfakes that can circumvent verification systems, but there is also a growing trend of 'friendly fraud'.
Friendly fraud involves the customers themselves defrauding businesses, often with refund fraud, which is a growing issue for online distributors.
AI makes fraud easy
Juniper’s research reveals AI has trivialised some aspects of digital crime, lowering the skill threshold necessary and, in turn, increasing the sheer volume of fraud attempts globally.
“eCommerce merchants must seek to integrate fraud prevention systems that offer AI capabilities to quickly identify emerging tactics,” Juniper research report author Thomas Wilson said.
“This will prove especially important in developed markets, where larger merchants are at higher risk of being targeted for fraud, such as testing stolen credit cards.”
Juniper recommends retaining the services of fraud protection and prevention services that also leverage AI, as they are able to recognise and counter emerging fraud patterns much more quickly.
The market intelligence firm also recommends introducing biometric verification and identification factors into their processes to add additional layers of security, as sophisticated deepfake fraud attempts become more common.