A recent study by software provider Riskified examined e-commerce trust in relation to online fraud. The data reveals a clear contradiction in the perception of retailers and buyers. […]
How common is online retail fraud – and how do buyers and merchants view the problem? According to a study by Riskified, a company that offers self-learning fraud prevention software, 69 percent of German retailers have reported an increase in fraud attempts since the start of the pandemic. Most common fraud method: illegal account takeover (48 percent). Second place went to phantom buyers (45 percent).
A third of consumers have increased concerns about online shopping
However, the majority of merchants (55 percent) are confident in their ability to prevent e-commerce-related fraud. However, according to the survey, customers differ: only 34 percent of consumers say they trust the capabilities of merchants in this matter. While nearly a third of German consumers (31 per cent) are increasingly expressing concerns about online shopping, 51 per cent assume that retailers will have more difficulty preventing fraud in the next year.
This also has long-term consequences for brand loyalty: Only 37 percent of German consumers would not blame the retailer if their accounts were hacked. 64 percent would never shop online at such a store again.
Respondents generally consider two-factor authentication to be a very effective fraud prevention method. However, merchants from Great Britain and France ranked it as the most harmful measure of sales, with American and German merchants taking the second place.
Fraud presents special challenges for retailers
“Unsurprisingly, the rapid growth of e-commerce has also led to an increase in fraud – and our research shows that the impact is significant for both retailers and consumers,” said Peter Elmgren, chief revenue officer at Riskified. “Fraud presents unique challenges for retailers who want to protect their stores while providing customers with a seamless and secure shopping experience. They lost $17 billion to online fraud in 2020, according to Juniper research, and that number is expected to exceed $25 billion in just three years.” “.
The study involved 4,000 consumers and 400 online retailers from the United Kingdom, France, Germany and the United States.