Juniper Research projects retailers could lose $71B in card-not-present fraud
Juniper Research has published new research which forecasts that retailers could lose $71 billion globally from fraudulent CNP (card-not-present) transactions over the next five years.
The “Online Payment Fraud: Emerging Threats, Key Vertical Strategies & Market Forecasts 2017-2022” report found that several factors including the United States’ shift to EMV cards, delays in 3DS 2.0 (3D-Secure) and click-and-collect fraud were key drivers behind the increasing loss.
The research found that many merchants still perceive combatting fraud as too expensive, and as a result, are ill-prepared to deal with the shift to online fraud following the introduction of EMV (CHIP and signature) payment cards in the US.
Despite this, Juniper’s cost analysis of FDP (fraud detection and prevention) solutions found that in most instances, merchants would gain value from their investment. Juniper urged companies across the value chain to increase their efforts in educating merchants on the benefits of FDP.
The report forecasts that fraudulent CNP physical goods sales will reach $14.8 billion annually in 2022.
Additionally, the report emphasizes that click-and-collect services were especially vulnerable given the lack of a residential delivery address.
Meanwhile, retailers are hesitant to implement stringent ID checks on pick-up over concerns that it would hinder the consumer experience and lower conversion rates.
The research predicted that three key areas would emerge in combating fraud in 2018. Juniper specifically cited machine learning as a key tool in identifying genuine users, while the shift to mobile eCommerce would rely on 3DS 2.0 and biometrics.
“2018 will herald the arrival of new tools in the fight against fraud,” said Juniper Research report author Steffen Sorrell. “3DS 2.0 will finally begin to rollout and will mark a paradigm shift in terms of merchants and issuers leveraging shared data. We also expect passive biometrics, such as the manner in which a device is handled, to become key in the future.”
The whitepaper, “Future Fraud: 3 Key Battlegrounds in 2018”, is now available on the Juniper website along with further details of the full research.
Previously reported, a recently released Juniper Research report identified Giesecke & Devrient, Gemalto and Synaptics as the leading disruptors within the mobile biometric authentication space.