Merchant losses to online payment fraud is expected to hit $206bn cumulatively between 2021 and 2025, new research claims.
A new report from Juniper Research states this figure is ten-times Amazon’s net income in the 2020 financial year.
Furthermore, it claims physical goods purchases are the main cause of online payment fraud, accounting for 47% of fraud losses in 2021.
The report, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2021-2025, urges payment fraud prevention vendors to offer services based on digital identity verification to reduce account takeover fraud incidents.
As threats continue to rise, so will opportunities for RegTech companies. The report claims spending on fraud detection and prevention platform services will exceed $11.8bn globally in 2025, rising from $9.3bn in 2021.
Recommendations in the report state vendors of these services should build platforms that can cover the emerging channels of payment traffic, such as open banking payments.
Nick Maynard, co-author of the research, said, “Given the large amounts of online payment transactions globally, it is essential that this transactional data is leveraged to continually detect fraudulent transactions. Payment providers who can use this data to identify new fraud sources and tactics will be those who prove to be the most resilient to this significant market loss.”
Finally, the report claims there has been a surge in synthetic identity and account takeover fraud caused by the pandemic.
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