Juniper Research is warning about the growing threat of online payment fraud. The firm’s latest report specifically predicts that merchants will lose $343 billion to online payment fraud between 2023 and 2027.
The rise in fraud corresponds to the rising volume of digital transactions. Juniper has previously reported that $1.2 trillion will be processed with mobile biometrics in 2028, as more and more consumers start to take advantage of the convenience of modern payment options. The problem is that fraudsters are innovating at a pace that rivals that of payment providers, and are finding new ways to exploit those new payment methodologies.
Much of the anticipated online payment fraud occurs during the sale of physical goods. In that regard, Juniper noted that physical goods are attractive to fraudsters since the actual goods can be resold for an additional profit once the fraudulent transaction is complete. That kind of fraud is expected to jump 110 percent in the next five years, and account for nearly half (49 percent) of all online payment losses in the forecast period.
Fraudsters are also expected to target money transfers, bank accounts, and more ephemeral goods like airline tickets. Popular techniques include phishing and other forms of social engineering, as well as business email compromise and full account takeover attacks. Juniper is encouraging businesses to implement multi-factor authentication to help counter that threat. It also suggested that robust address verification can be particularly effective at stopping fraud during the sale of physical goods, since it can flag cases in which someone’s mailing address does not correspond to any of their payment information.
“No two online transactions are the same, so the way transactions are secured cannot follow a one-size-fits-all solution,” said Nick Maynard, the author of the report. “Payment fraud detection and prevention vendors must build a multitude of verification capabilities, and intelligently orchestrate different solutions depending on circumstances, in order to correctly protect both merchants and users.”
Juniper recently opened the nominations for its 2022 Future Digital Awards for Fintech & Payments. The company has also argued that behavioral biometrics can help stop e-commerce fraud without adding undue friction to the payment process.