New data from Juniper Research (www.juniperresearch.com) has found that the value of online fraudulent transactions is expected to reach $25.6 billion by 2020, up from $10.7 billion last year. This means that by the end of the decade, $4 in every $1,000 of online payments will be fraudulent.
The new study identified three hot areas for online fraud: eRetail (65% of fraud by value in 2020 – $16.6 billion); banking (27% – $6.9 billion); and airline ticketing (6% – $1.5 billion). The study also claimed that eRetail would be particularly susceptible to online fraud, with the value of fraud in this sector increasing at twice that of banking and seven times that of airline ticketing.
Juniper Research says that, although banks are able to counter online banking fraud by deploying new technologies such as 3D-Secure and device fingerprinting, these measures often only provide temporary respite as fraudsters quickly find new ways to defraud. Similarly, while extensive efforts by the airline industry to deploy sophisticated Fraud Detection and Prevention (FDP) systems has reduced fraud significantly for some major airlines, this industry has also seen fraudsters shift their focus to other perceived weak spots in the system.
“A few larger airlines claim that they have reduced eTicket sales fraud to less than 0.1% or 10 basis points of revenues” said research author Gareth Owen. “When thwarted, however, fraudsters quickly move on to easier pickings such as frequent flyer fraud, for example.”
