The holiday brought good news for digital retailers: strong growth in e-Commerce transactions, which rose 21% compared to the previous year. The bad news is that cyber crooks followed the money into cyberspace: fraud attempts increased 8% during the period from Thanksgiving to Dec. 31, 2015.
According to ACI Worldwide, which analyzed hundreds of millions of transactions from global retailers, dishonest activity certainly is not limited to the holiday season — and it’s on the rise. In 2014, one out of every 72 transactions was a fraudulent attempt; in 2015, it was one out of every 67.
In 2015, fraud attempt rates spiked on Christmas Eve (2.4%), Thanksgiving (2%), Black Friday (1.8%) and holiday shipment cut-off days (1.6%), the result of two key trends:
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• Electronic gift cards, which have the highest fraud attempt rates across all products, are a popular last-minute gift purchase; and
• Buy online/pick up in-store (BOPIS), which has a higher fraud attempt rate than other modes of delivery. In fact, attempted fraud rates for BOPIS rose 47% in 2015 compared to the previous year. This was nearly as high as the 50% attempted fraud rate for next-day and overnight deliveries.
Another segment that may be vulnerable to fraud is international sales transactions, which increased 29% in 2015, driven by favorable currency rates, shipment costs and region-specific products. “Global commerce has seen a huge increase in the past year, and it is critical for merchants to have integrated fraud prevention monitoring with cross-border payment acceptance, along with single tokenization and a single view of the customer,” said Mike Braatz, SVP, Merchant and Risk Solutions at ACI Worldwide in a statement. “Merchants must implement a sophisticated multi-layered, multi-dimensional approach to fraud prevention for all transaction channels.”
