![]() eCommerce lost nearly $7 billion to chargebacks in 2016. Third and most importantly, chargebacks are extremely expensive. You can read the full horrifying story here. Yeah, it sucked but thank God it was resolved quickly. We weren’t able to collect our revenue and get new customers to sign up for our service. In the early days of our business, our payment processor closed our account because of some fraudulent transactions and we were suddenly at a standstill. □ Trust me I know what I’m talking about. Second, it can be devastating when one day you wake up and you notice you’re out of business because your payment processor suspended your account. You have to figure out how to automate it and prevent them before they happen. You’re running a business and you can not afford to spend your entire day dealing with these types of problems. If your online store or SaaS (software as a service) has a high number of sales or sign-ups you’ll have to spend a lot of time dealing with fraudulent transactions, purchases, and disputed charges. I’m sure you know the answer but let me summarize for you the real consequences of online fraud and how it impacts your business.įirst, it doesn’t let you focus on your business. Why You Need to Prevent Credit Card Fraud, Why It’s Bad for Your Business We can see that these are serious numbers and we’re talking about a lot of lost revenue when it comes to online payments fraud. The most affected industries are digital goods, clothing, electronics, food, and luxury. Suganthan Mohanadasan View plans Online fraud attack rate We also try to be at that level with our SaaS tool support. Kinsta spoiled me so bad that I demand that level of service from every provider now. Below you can see the volume of attacks per 1,000 transactions in 2015. Retailers lost an estimated 1.3% of revenue in 2015, more than double the rate of 2014. $7.77 out of ever $100 are at risk for digital goods.įraud attacks by industry (Image source: Pymts and Forter)Īccording to the LexisNexis’ study, annual fraud costs for US retailers reached $32 billion in 2014.Fraud attack rate almost doubled for luxury goods between Q1 and Q4.Fraud attack rate more than quadrupled for digital goods between Q1 and Q4.In Q1 2016, some $4.79 out of every $100 in transactions was at risk (in Q1 2015, it was “only” $1.89).ĭigital fraud trends (Image source: Pymts and Forter).In Q4 2015, there were 27 fraud attempts for every 1,000 transactions.Here are some of the most interesting findings: You can download the full study from this link. Today we’ll use some of the numbers from the survey conducted by Pymts and Forter in 2016. It’s not surprising, but the volume of digital fraud is rapidly increasing. ![]() And believe me, that’s a pretty good feeling! Let’s dive into the details. We don’t have to spend any more time reviewing disputed charges and suspicious signups. I’ll show you how Stripe Radar can make your life easier! Thanks to this machine learning-based solution we were able to reduce credit fraud by 98% at Kinsta. If you’re using Stripe as your online payment processor than this post is for you. They cause your business constant headaches and more importantly cost you lot of money. It’s frustrating, isn’t it? I know how you feel. The original cardholder (at some point) will discover this unauthorized transaction and initiate a dispute (chargeback) with their bank. The individual might buy an item (or buy a digital product) and later resell it online for a fraction of the real price. Online payments fraud involves an individual obtaining someone else’s credit card number and using it to make unauthorized online purchases. Just to make sure we are on the same page, here is a brief description of online payments fraud: If you’re a business owner probably you’re probably familiar with this situation and are always looking for new ways to reduce the number of fraudulent transactions, and better yet, prevent them as much as possible. ECommerce shop owners and digital product providers would like a slice of the cake but as these industries continue to grow, so do incidents of eCommerce/SaaS credit card fraud.
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