ATLANTA, Aug. 24, 2021 /PRNewswire/ -- The 12th annual
LexisNexis Risk Solutions True Cost of Fraud™ Study:
Ecommerce and Retail 2021 U.S. and Canada Edition provides a
snapshot of current fraud trends and reveals key pain points
related to merchants expanding internationally, adding new payment
mechanisms and transacting through online and mobile channels. This
year's findings were established through a survey conducted in
March and April 2021 and show that
the cost and volume of fraud has risen significantly since last
year's survey and compared to a separate pre-pandemic report.
The LexisNexis Fraud Multiplier™ projects that every
$1 of fraud costs U.S. retail and
ecommerce merchants $3.60 compared to
$3.13 prior to the pandemic. This is
a 15% increase from a pre-pandemic survey and a 7.1% increase since
the 2020 survey conducted during the pandemic. The cost of fraud in
Canada is up 5.2% since 2020, now
at $3.02. The mobile channel plays a
key role in this increase in both countries, as more consumers
turned to their devices to shop during the pandemic.
The pandemic changed consumer behaviors and fraudsters followed,
taking advantage of merchants that accelerated mobile channel
strategies. Respondents indicate there has been increased use of
mobile apps and contactless payment methods at the expense of
mobile browsers. This change in behavior comes with a fraud cost
shift from browsers to these alternative methods.
Key Findings and Trends from the Report
- Fraud Volumes Soar: The overall volume of fraud attacks
has grown beyond pre and early pandemic periods, with businesses
offering online/mobile transactions experiencing the largest
year-over-year increase. U.S. ecommerce merchants have been hit
particularly hard with merchants reporting a 140% increase in
attacks since 2020 and their counterparts in Canada reporting a 52% increase. Successful
attacks rose 52% and 45% in those markets respectively.
- Struggles with Identity Verification: Identity
verification remains a top challenge for merchants and represents a
larger share of fraud losses compared to previous years. A
recent LexisNexis Cybercrime Report revealed that synthetic
identities and other account-related fraud frequently match to
breached digital identity data such as email addresses and phone
numbers. Merchants struggle to verify digital identity data and
balance fraud detection with an exceptional customer experience. To
that end, there is limited merchant use of solutions designed to
support both issues.
- Implementing Fraud Mitigation Tools: U.S. retailers tend
to use more fraud solutions than Canadian retailers. This includes
passive/digital identity-based solutions that are effective at
detecting sophisticated fraud while normalizing customer friction.
The average U.S. retailer uses eight fraud prevention solutions
while the average Canadian retailer only uses five. Use is more
limited among ecommerce merchants in both countries, which weakens
their fraud detection and prevention efforts.
- Quality Counts: Merchants that are serious about
optimizing fraud detection while minimizing customer friction use
multi-layered solutions across different customer touchpoints. This
includes solutions that verify physical identity attributes,
digital identity attributes and transaction risk. Merchants who
invest in best-practice, multi layered solutions that are
integrated with cybersecurity and digital experience operations
experience a 71% lower volume of successful fraud attacks and a 12%
lower cost of fraud.
"Retailers should anticipate and prepare for increased fraud in
the foreseeable future, even as we see a light at the end of the
global pandemic tunnel," said Kimberly
White, senior director, fraud and identity,
LexisNexis® Risk Solutions. "We should all assume
that the accelerated movement to online/mobile transactions and
payments spurred by the pandemic will continue as the preferred
method for transacting. This means businesses must continue to
build out and enhance the digital customer experience while
protecting themselves against fraud.
"Organizations can no longer rely on manual processes and thin
technologies to minimize fraud and reduce challenge rates, manual
reviews and costs," White continued. "A solid solution includes
implementing a robust fraud and security technology platform, which
allows businesses to adapt to the changing digital environment
while realizing strong fraud management and a risk-appropriate
friction experience for genuine customers. Merchants should
therefore take a multi-layered solution approach involving digital
and transaction risk mitigation solutions that integrate with
cybersecurity and digital customer experience operations."
2021 LexisNexis True Cost of Fraud™ Study Ecommerce
and Retail 2021 U.S. and Canada
Edition Methodology
This is the 12th
annual comprehensive research study on U.S. merchant fraud and the
second year surveying Canadian merchants. This year's study
surveyed 1,118 risk and fraud decision makers from March through
April 2021. Respondents represented a
wide spectrum of retail merchants. Findings provide a current
snapshot of key pain points related to adding new payment
mechanisms, transacting through online and mobile channels and
expanding internationally, amongst other topics. Study also
reflects activity, fraud risks, challenges and costs associated
with pandemic impacts. The margin of sampling error for
findings reported at an overall level is +/-3.5 at the 95%
confidence interval.
Download a copy of the 2021 True Cost of Fraud™ Study
for Ecommerce and Retail, U.S. and Canada Edition.
Attend a webinar on Thursday, August
26th at 3:00 pm ET
to cover the study's findings.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data
and advanced analytics to provide insights that help businesses and
governmental entities reduce risk and improve decisions to benefit
people around the globe. We provide data and technology solutions
for a wide range of industries including insurance, financial
services, healthcare and government. Headquartered in metro
Atlanta, Georgia, we have offices
throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a
global provider of information-based analytics and decision tools
for professional and business customers. For more information,
please visit www.risk.lexisnexis.com and www.relx.com.
Media Contact:
Marcy
Theobald
678.694.6681
Marcy.Theobald@lexisnexisrisk.com
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