Online fraud transactions to more than double by 2020, study says
Online fraud transactions are expected to reach $25.6 billion (£17.6 billion) by 2020, up from $10.7 billion (£7.4 billion) last year. By the end of the decade, it's expected that $4 (£2.7) in every $1,000 (£687) of online payments will be fraudulent.
Juniper Research's study, Online Payment Fraud: Key Vertical Strategies & Management 2016-2020, discovered that the implementation of chip and PIN services at Point of Sale (POS) locations in the US is a probable key factor driving activity in online fraud. North America, Latin America, EMEA, Asia Pacific, Indian Subcontinent and the Far East and China are key regions for which the study was based.
The research said the greater security afforded by chip and PIN would convince fraudsters to divert their attention from the in-store environment to the card not present (CNP) fraud.
Three hot areas for online fraud by value in 2020 will be eRetail (65 percent - $16.6 billion or £11.4 billion), banking (27 percent - $6.9 billion or £4.7 billion) and airline ticketing (six percent - $1.5 billion or £1 billion).
Two key areas for fraud within eRetail are ‘buy-online, pay in-store' and electronic gift cards. Even though banks have the capabilities to counter online banking fraud, the measures taken such as device fingerprinting and 3D-Secure only provide temporary solutions as fraudsters quickly find new ways to operate.
Fraud Detection and Prevention (FDP) systems have reduced fraud significantly for some major airlines. “A few larger airlines claim that they have reduced eTicket sales fraud to less than 0.1 percent or 10 basis points of revenues. When thwarted, however, fraudsters quickly move on to easier pickings such as frequent flyer fraud, for example,” said research author Gareth Owen.