The world of ecommerce is evolving rapidly. With over 2.64 billion online buyers, the ecommerce sector will surpass $6.3 trillion by the end of 2024, according to SellersCommerce.
However, keeping up with the growing ecommerce sector requires a deep understanding of the risks and emerging trends that come with it. Ecommerce fraud is one of those risks that businesses cannot afford to ignore. As online shopping continues to grow, so too does the risk of fraudulent activities.
In this blog post, we’ll cover the latest statistics surrounding ecommerce fraud in 2024, exploring the most common types of attacks, trends, and preventions.
Let’s get started!
Ecommerce Fraud Quick Statistics
- Ecommerce fraud losses are projected to reach $206 billion by 2025. (Medium)
- Over 43% of the consumers have been a victim of fraud. (Exploding Topics)
- 62% of merchants reported an increase in friendly fraud. (MRC)
- Retail is the most common sector that faces fraud in the ecommerce industry. (EarthWeb)
- 1 out of every 10 ecommerce transactions is a fraud attempt. (Worldmetrics.org)
- North America is the epicenter of ecommerce fraud, with over 42% of all reported fraud. (Medium)
- 62% of the surveyed merchants are using or planning to use AI-based tools to fight fraud. (Twice)
- In 2023, merchants have used 5 fraud detection tools on average. (Cybersource)
Most Common Ecommerce Fraud Statistics
- The 2023 Global Ecommerce Payments And Fraud Report shows that top fraud attacks remain the same from 2021 to 2023. (Report)
Source: 2023 Global Ecommerce Payments And Fraud Report
- Phishing remains the most common type of ecommerce fraud, affecting 43% of global merchants. This includes various tactics such as pharming and whaling, making it a persistent threat to online businesses. (DemandSage)
- The US conducts the most phishing attacks, dispatching about 8 million spam emails daily, followed by countries like France, Germany, Russia, and Canada. (JumpCloud)
- Phishing attacks are also seasonal, peaking during the holiday season when online shopping activity is high. During the three months of holiday, 20% of phishing activity for the year is reported. (Bolster AI)
- August has more phishing activities than any other month of the year. 2023 saw a 27.8% increase in activity compared to 2022, most of which was recorded in August. (2024 State of Phishing & Online Scams)
Source: Bloster, 2024 State of Phishing & Online Scams
- According to data from Visa, friendly fraud accounts for up to 70% of all chargebacks. (Mastercard)
- Among the 300 surveyed merchants by Edgar, Dunn & Company, nearly three-quarters have seen an 18% increase in friendly fraud since 2021. (Twice)
- 72% of the merchants reported increased friendly fraud over the last three years. (Chargebacks911)
Source: Chargebacks911
- Merchants are losing significant amounts of revenue due to fraud. Mastercard reported that in 2023, merchants lost approximately $117.47 billion due to chargebacks. (Mastercard)
- Friendly fraud affects ecommerce businesses in multiple ways, including revenue loss, cannibalization of sales due to stricter store policies, and the high cost of fraud management. (ChargeFlow)
- The estimated cost of managing first-party misuse is approximately $100 for every dispute. (MRC)
- Global card fraud losses are expected to reach $43.47 billion by 2028. (Nilson)
Source: Nilson Report (Data); merchantsavvy (Graph)
- The Global Fraud Report of 2024 shows that the surveyed merchants expect to increase their spending by 51% on staff and personnel and 60% on tools and technologies for fraud management by the next 2 years. (Global Fraud Report 2024)
- 908,439 identity thefts were reported in 2023 in the US. (WiserNotify)
- 45% of U.S. online shoppers have engaged in some form of refund fraud, which often involves using fraudulent coupon claims or manipulating discount policies. (EarthWeb)
- Digital coupon usage has surged in the past few years, with 67% of consumers using digital coupons in 2023. However, this growth has been accompanied by a rise in coupon fraud schemes, particularly in ecommerce settings where automated discount fraud is increasingly common. (Capital One Shopping)
- 59% of online merchants reported a rise in various types of promotional abuse, including fraudulent coupon use. (Ravelin)
- Refund and coupon abuse are costing businesses millions annually, with some estimates suggesting $48 billion in projected global ecommerce fraud losses in 2023. (Juniper Research)
- Nearly 40% of traffic generated through affiliate programs is fraudulent, costing marketers billions annually. (DemandSage)
- 2023 report shows that as many as 85% of merchants have experienced card testing fraud, a tactic often used by affiliate fraudsters. (Global Fraud Report 2023)
Ecommerce Fraud Statistics Based on Country
- The US is the most fraud-prone country globally; in 2023, 42% of global ecommerce fraud occurred there. (Juniper Research)
Source: Juniper Research
- About 34% of US consumers have experienced ecommerce fraud, and the country has seen a 140% increase in credit card fraud over the past three years. (DemandSage)
- The US lost $10.16 billion in card not found fraud. (EMARKETER)
Source: EMARKETER
- Fraud attacks have risen in both consumer and business accounts recently. The US has experienced a 62% increase in consumer account fraud attacks and a 52% rise in fraud in business accounts. (Alloy)
Source: ALLOY
- Latin America experiences significant fraud losses, with 20% of ecommerce revenue lost to fraud. (Mastercard)
- European companies spend, on average, 10% of total revenue on fraud management. (Statistica)
- In 2022, a survey found that 3.7% of all ecommerce orders in Latin America were fraudulent. (Mastercard)
- Ecommerce card fraud loss reached £270M in 2023; the report shows a 9% change from 2014 to 2023 data. (UK Finance)
Source: UK Finance Annual Report 2024
- Canadians have lost $123 million to fraud, affecting 7,908 people in 2024. (Devon)
- Due to identity fraud, Canadians have lost 123 million CAD in 2024. (Statista)
- Online payment fraud losses to exceed $200B in 2024 in Asia Pacific. And ~5% of revenue is lost yearly due to fraud. (APAC Ecommerce)
- 61% of merchants from Asia Pacific reported identity theft as the main ecommerce theft. 3.6% of ecommerce orders lead to chargebacks, the second highest ecommerce fraud. (Report)
Source: IG APAC Ecommerce Dos and Dont’s
- In 2021, 85% of online merchants from Switzerland reported being targeted by fraudsters, marking Switzerland as one of the most affected countries in Europe. (Medium)
- In 2023, the federal office processed 187,000 reports via antiphishing.ch and shut down 8,223 websites in Switzerland. (SwissInfo.ch)
- Last year, Japan saw an 8.3% increase in scams, and 19,033 cases were reported. (ASIA – PACIFIC)
- Japan’s fraud detection and prevention market is expected to grow by 22.14% from 2024 – 2032. (imarc)
- Brazil has seen a massive surge in fraud as ecommerce businesses have grown. The nation’s online merchants are heavily impacted by payment fraud. (Merchant Savvy)
Industry Specific Ecommerce Fraud Statistics
- The NRF’s 2023 Retail Security Survey found that 67% of retailers experienced a rise in account takeover fraud. (Experian)
- IBM’s 2023 Cost of a Data Breach Report revealed that the average cost of a data breach in the financial services industry was $4.88 million. (IBM Security)
- Merchant losses from chargebacks, including fraud-related ones, are expected to exceed $91 billion by 2028. (Paypers)
- Subscription-based digital services, including SaaS products, have experienced a 20% increase in fraud, often through credential stuffing attacks and fake account setups. (CyberSource)
- Estimated fraud rates in 2023 show that Travel and Hospitality face the most credit card fraud among 20 other ecommerce industries. (Clearly Payments)
Source: Clearly Payments
Fraud Prevention Statistics
- The ecommerce fraud detection and prevention industry is valued at $48 billion in 2023 and is expected to grow to $103 billion by 2030, driven by increasing fraud activities. (EarthWeb)
- 61% of ecommerce merchants view multi-factor authentication as one of the most effective fraud prevention tools. (Exploding Topics)
- Incorporating machine learning and AI for fraud detection is becoming essential. It helps companies reduce fraud rates by using behavioral analytics and risk-scoring models. (Mastercard)
- Studies show that 75% of ecommerce companies plan to increase their budgets for fraud prevention in 2024, with 20% aiming to grow spending by at least 20%. (Ravelin)
- The fraud prevention and detection market has grown from $50.32B to $61.01B in 2024. With an annual growth rate of 21.2%. (The Business Research Copy)
- The fraud prevention and detection industry is estimated to grow $100B by 2027. (Statista)
Source: Statista
- Since 57% of all ecommerce fraud attacks target mobile devices, companies are increasingly focusing on mobile-specific fraud prevention strategies, including mobile-specific biometric authentication. (The Small Business Blog)
Final Thoughts
Understanding ecommerce fraud statistics is essential to stay updated in the industry. With the rapid growth of the ecommerce sector, it would only be easy to keep up with the competition with a proper understanding of the ecommerce sector.
Having a thorough idea of ecommerce fraud and prevention statistics, you can prepare your business for any threats you may come across.
We’ve gathered essential statistics on eCommerce fraud to help you navigate the risks. Stay ahead by understanding key fraud trends and implementing the necessary protective measures.
Frequently Asked Questions (FAQs)
- What should consumers do to protect themselves from e-commerce fraud?
Ecommerce consumers should take proactive steps to protect themselves from the threats of fraud. Here are some of them –
- Using Strong Passwords: Create complex passwords for online accounts and change them regularly to prevent unauthorized access.
- Enable Two-Factor Authentication (2FA): This adds an extra layer of security by requiring a second verification form, making it harder for fraudsters to access accounts.
- Monitor Financial Statements: Regularly check bank and credit card statements for unauthorized transactions and report suspicious activity immediately.
- Be Wary of Phishing Attempts: Always verify the authenticity of emails or messages requesting personal information and avoid clicking suspicious links.
- What role do chargebacks play in e-commerce fraud?
Chargebacks are a significant aspect of ecommerce fraud, serving as a tool for consumers to make unauthorized transactions. However, merchants face severe financial repercussions due to chargebacks, which can affect their profits.
Additionally, a high rate of chargebacks can damage a merchant’s reputation and lead to penalties from payment processors. So, businesses must handle disputes effectively to minimize chargeback rates.
- What are some effective fraud prevention strategies for e-commerce businesses?
To combat e-commerce fraud, you can implement several effective strategies in your business. Here are some strategies to follow –
- Use Advanced Fraud Detection Tools: Using AI and machine learning can help businesses identify and flag suspicious transactions before they occur.
- Verify Customer Identity: Implementing identity verification measures such as two-factor authentication or identity checks for new customers can help reduce the risk of fraud.
- Educate Employees and Customers: Training staff to recognize fraud indicators and educating customers about safe shopping practices can create a more secure online environment.