According to CyberSource’s 11th annual study of e-commerce fraud. U.S. and Canadian merchants experienced a 1-2% decline in the average percentage of online revenues lost to fraud. Losses from fraud have held steady at 1.4% since 2006. Online fraud will cost North American merchants an estimated $3.3 billion in losses this year, down 18% from the $4 billion in 2008.

Reasons for the decrease in fraud include automation of fraud-detection with 67% of merchants using automated anti-fraud tools to sort orders compared with 56% in 2008. Top tools include device fingerprinting, card verification values (CVV numbers) and address verification services.

International fraud rates dropped the 50%, down from 4% in 2008 to 2% in 2009. Among merchants that accept international orders, foreign orders account for 21% of total volume, up from 17% in 2008. Merchants rejected fewer international orders, 7.7% vs. 10.9% in 2008.

Fraudulent orders are still expensive for merchants. For example, 49% of fraudulent transactions resulted in chargebacks to merchants up from 42% in 2008. Merchants this year fight 53% of their fraud-coded chargebacks and win 42% of the time.

Twenty-one percent of merchants think fraud is becoming more complex and 12% think it is getting harder to detect. Forty-eight percent of merchants believe fraudulent orders appear better camouflaged than ever before.

Proper use of a payment processing gateway is good protection against fraud.  And consider using chargeback prevention services to mitigate processing risk. 

For more information, contact info@paynetsecure.net