Fraud Attempts Expected to Increase 30% During Peak Holiday Season
November 22 2017 - 8:00AM
Merchants and consumers are gearing up for the busy holiday
shopping season and according to new benchmark data from ACI
Worldwide (NASDAQ: ACIW), a leading global provider of
real-time electronic payment and banking solutions,
merchants can expect a 30 percent increase in omni-channel
fraudulent activity compared with the same period last year. The
data* based on hundreds of millions of transactions from leading
merchants, provides actionable insights that merchants, banks,
financial intermediaries and consumers can leverage to protect
against fraudulent activity this holiday season.
Principal findings include:
- Fraud attempt rates expected to increase 30 percent
- Identity theft (via data breaches), account takeover (including
phishing attacks) and friendly fraud (chargebacks) continue to be
the biggest challenges to consumers and merchants
- Volume of purchases increased by 14 percent (Jan. 1, 2017-Oct.
31-2017), which is higher than the overall value of purchases (12%)
- The overall value of sales is lower because products are
competitively priced and consumers are lured by promotions, coupons
and free shipping offers
- Price continues to drive consumer loyalty—there is a massive
price compression underway, particularly for online shopping
- The attempted fraud average ticket value (ATV), or a merchant’s
average size of individual sales by credit card, is expected to
increase from $210 to $215
- The ATV will go up because fraudsters are targeting pricier
items
- Key trends driving 2017 fraudulent shopping activity
- Electronics and home goods (vacuums, blenders, cookers)
continue to be targeted by fraudsters
- Fraudsters like immediacy: buy online and pick-up in store, and
next-day shipment continue to be popular tactics
- Massive data compromises led to a drastic climb in fraud over
the summer
- The 2016 trend of lower ticket prices continues in 2017, due to
alternative shipping methods (e.g. buy online/pick-up in-store),
low-priced electronics and promotions
- 2017 ATV overall will be $130, down from $133 in 2016
- Peak shopping days
- Cyber Monday is now expected to have the highest processing
volumes of any day of the year with 17 percent more purchases than
Black Friday
“Fraud is increasing at an alarming rate—due to a potent
combination of data comprises, identity theft, account takeover and
friendly fraud,” said Erika Dietrich, global director of payments
risk, ACI Worldwide. “Fraudsters continue to target electronics and
home goods—and show preference for immediate purchases like buy
online, pick-up in store and next-day delivery. It is imperative
that both consumers and merchants protect themselves during the
holiday shopping season given this new landscape of persistent and
systemic fraudulent activity.”
ACI ReD Shield—a key component of ACI’s UP Payments Risk
Management solution—delivers real-time, multi-tiered protection
that’s tailored to the needs of eCommerce merchants, payment
service providers (PSPs) and Independent Sales Organizations
(ISOs). This intelligent solution is delivered as a managed service
through an expert team of risk analysts, and provides instant
decisions (accept/challenge/deny) on eCommerce and mCommerce
transactions.
Sensible Tips for Consumers to Combat Fraud this Holiday
Shopping Season
- Do shop at more reputable websites. One way to ensure that
personal details and payment information is safe is to check the
bottom right hand corner of a website during the check-out process
and look for a security icon that ensures it’s a safe
transaction
- Lock cell phones and use sophisticated passwords when mobile
shopping
- Use biometric authentication features on mobile device when
possible (e.g. thumb print or facial recognition)
- Do not use the same e-mail and password combination with
multiple merchants; fraudsters can use these credentials for future
account takeovers
- For families with young children especially, set up pins for
online accounts to avoid “friendly fraud” and subsequent
chargebacks
- Do not leave boxes on front porches. During the busy holiday
shopping season, fraudsters are looking to pounce as consumers are
distracted
- Do not email or share any financial information over the
phone—only enter financial information via secure online shopping
sites
- Do track and monitor credit and debit card
spending. Automated alerts for online transactions can let
consumers know exactly when they—or someone else—attempts to use a
card.
* Methodology and Demographics:
Approximately 20 ReD Shield Merchants representing hundreds of
millions of transactions; these leading merchants have been
utilizing ACI’s service for two years.
Date Range:
January 1 to October 31, 2016
January 1 to October 31, 2017
Terminology:
- Volume is number of transactions, comparing last year to this
year, like for like global retail customers
- Value is number of transactions, comparing last year to this
year, like for like global retail customers
- Fraud Attempt Rate: a transaction associated to any one or more
of the following:
- Transaction data point confirmed fraud as a result of a
merchant verifying
- Transaction data point matched a record in our ReD Shield
global screening negative database—chargebacks, Credit Card Numbers
being sold online in underground chat channels, or reported as
fraud by an Issuer pattern matching a recent confirmed fraud
behavior.
About ACI Worldwide
ACI Worldwide, the Universal Payments (UP) company,
powers electronic payments for more than 5,100
organizations around the world. More than 1,000 of the largest
financial institutions and intermediaries, as well as thousands
of global merchants, rely on ACI to execute $14 trillion
each day in payments and securities. In addition, myriad
organizations utilize our electronic bill presentment and
payment services. Through our comprehensive suite of software
solutions delivered on customers’ premises or through ACI’s private
cloud, we provide real-time, immediate
payments capabilities and enable the industry’s most
complete omni-channel payments experience. To learn more
about ACI, please visit www.aciworldwide.com. You can also
find us on Twitter @ACI_Worldwide.
© Copyright ACI Worldwide, Inc. 2017. ACI, ACI Worldwide,
ACI Payment Systems, the ACI logo, ACI Universal Payments, UP, the
UP logo, ReD, PAY.ON and all ACI product names are trademarks or
registered trademarks of ACI Worldwide, Inc., or one of its
subsidiaries, in the United States, other countries or both. Other
parties’ trademarks referenced are the property of their respective
owners. Product roadmaps are for informational purposes only and
may not be incorporated into a contract or agreement. The
development release and timing of future product releases remains
at ACI’s sole discretion. ACI is providing the following
information in accordance with ACI's standard product communication
policies. Any resulting features, functionality, and enhancements
or timing of release of such features, functionality, and
enhancements are at the sole discretion of ACI and may be modified
without notice. All product roadmap or other similar information
does not represent a commitment to deliver any material, code, or
functionality, and should not be relied upon in making a purchasing
decision.
Attachments:
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/18ea7975-9427-467f-b0ea-a30069576793
Andrea Snyder
ACI Worldwide
7813704817
andrea.snyder@aciworldwide.com
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