Understanding the Global Fraud Market
There is no denying that the future of sales is in e-commerce. Recent research estimates that by 2019, the global e-commerce market will be worth $2.4 trillion. This is both an exciting and formidable number. The opportunities for growth are tremendous, but so are the opportunities for risk and fraud. As an e-commerce merchant, you are undoubtedly enthusiastic to get your share of profit from this estimated value—which is why it’s so important to think about your e-commerce fraud solution.
The connection between growing online sales numbers and increasing online fraud numbers cannot be ignored. The good news is that there are real steps and viable solutions you can implement today that will ensure you’re taking advantage of the best of e-commerce.
A recent Worldpay study reveals some interesting thoughts expressed by merchants on how to best stem the growth in e-commerce fraud. The Fraud Trends 2016 study highlights that most merchants recognize that data analytics could be used more effectively, more work needs to be done to use social media properly, and more knowledge is required on mobile fraud risk and transactions.
Digging into E-Commerce Fraud
The Worldpay study is based on results from 200 respondents who were contacted by email, social media, and at the Merchant Risk Council Conference in Las Vegas 2016. Additionally, data was collected directly from interviews with senior employees of six major e-commerce merchants.
- Mobile is higher risk: While mobile is recognized to be higher risk, there is still no consensus on how to manage this risk. The survey data shows that 59% believe there’s an increased risk, but only 33% of merchants are treating mobile transactions differently.
- Data is key: The majority of respondents admit that while they want more data and insights into transactions, they are not using the data that they are currently receiving to its full potential. In fact, 58% of respondents collect information that they don’t use.
- Future is front and center: 93% of respondents said they are looking and planning ahead. Businesses are focused on learning more about emerging technologies and how to stay ahead of the fraudsters.
This highlights the need for merchants to constantly evolve and move with market forces. As this recent study shows, most merchants are already planning for the future; however, the same group surveyed is not harnessing the data they currently have available to them.
Taking Action Against E-Commerce Fraud
The next step for you is to understand where the gaps are in your company’s e-commerce fraud prevention strategies. Considering the information revealed in Fraud Trends 2016, some imperative questions to ask your management and fraud prevention team should include:
- How do our mobile transactions compare to the rest of our e-commerce transactions? Are we seeing a correlation in fraud numbers with these sales modes? How are we going to handle the expected growth in m-commerce?
- Of the data we’re collecting, what are we using and what are we ignoring? How are we analyzing this data? Is there a better way to collect and share this data to prevent e-commerce fraud?
- How are we using the current technologies to prevent fraud? Which technologies should we be investing in to protect ourselves from savvy fraudsters? Are we in the mode of react-and-respond when it comes to fraud, or are we actively protecting our business from these threats?
The only way you can truly prepare for the rapid expansion of e-commerce sales and fraud is to drill down into what you’re really doing today, and then take steps to improve your solutions. Remember that an end-to-end solution that provides both front-end and back-end data analysis and support can protect your business from savvy fraudsters and outright criminals. If the answers to the questions above have you concerned, contact us to learn more about how we can help your company be protected today.