We know that e-commerce is one of the greatest ways to shop, online or offline, and it is worth noting that there are huge advantages to e-commerce. However, if you are running an e-commerce business, you would say there are disadvantages to running an online business compared to an offline one. This is because there are bad actors in every industry, and this goes for the e-commerce industry as well with people who are looking to fraud the sellers online. We have also recently published an article on some of the most common ways people fraud on Amazon and we recommend you to read that article.
Now, a study has been published by Ravelin regarding frauds seen by e-commerce merchants and says that they are struggling to survive because of this. The data reveals that “59% of merchants have seen a huge leap in online payment fraud in the last twelve months. Other merchants reported account takeover (51%), promotion abuse (up 52%), refund abuse (up 53%) and customer fraud/friendly fraud (up 40%)”. Furthermore, “over half (58%) of online businesses polled in the UK plan to grow their fraud teams in the next year. Everywhere else the world, the trend is even more pronounced, with 80% of merchants in Germany, 72% in the US, and 86% in Australia expecting teams to grow in size”.
Ravelin CEO says that “Over the years merchants have built up fraud investigation teams which they’re justifiably proud of. But fraud continues to grow and mutate: simply throwing more people and money at the problem won’t make it go away. Losses will continue to grow”. Martin Sweeney, Ravelin’s CEO, adds that “Businesses need to get on the front foot managing fraud: using automation to nip fraudulent transactions in the bud. Better automation helps teams scale and frees up fraud investigators from mundane tasks enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth. With the economy in an uncertain place, enabling growth must become the priority.” Ravelin’s survey shows that new types of fraud have also increased and one of them involves “policy abuse”.
