A new study from Juniper Research, a company of experts in fintech and payment markets, has revealed the value of eCommerce fraud will rise from $44 billion in 2024 to $107 billion in 2029, a growth of 141%.
The study found that AI is fueling the sophistication of attacks across the eCommerce ecosystem, with the use of deepfakes created using AI to defeat verification systems being a key threat. This threat, combined with rising levels of ‘friendly fraud,’ where fraud is committed by the customer themselves, such as refund fraud, is increasingly threatening merchant profitability.
AI Use by Fraudsters Driving Risk
AI is enabling fraudsters to remain ahead of security measures and commit sophisticated attacks on a greater scale. By creating credible messages and a large number of synthetic identities, AI is facilitating higher quality attacks with an unprecedented frequency. These technologies are also highly scalable; empowering fraudsters to heavily automate their attacks and overwhelm rules-based prevention systems.
“eCommerce merchants must seek to integrate fraud prevention systems that offer AI capabilities to quickly identify emerging tactics,” Thomas Wilson, author of the report, said. “This will prove especially important in developed markets, where larger merchants are at higher risk of being targeted for fraud, such as testing stolen credit cards.”
How Should Merchants React?
Merchants are employing these same technologies to recognize emerging fraud patterns and react in real-time. Merchants must work to incorporate biometric identification into checkout processes to further secure transactions. By using methods such as liveness detection, merchants will be able to protect their business and customers from increasingly sophisticated AI deepfake fraud attempts.
