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Fraud in Global B2C E-Commerce &Online Payment 2014

  • October 2014
  • -
  • yStats - Global E-Commerce Intelligence
  • -
  • 77 pages

Fraud Fears Hamper Growth of Online Retail

Hamburg-based business intelligence organization yStats.com has released a report on the effects of fraud on B2C E-Commerce and online payments. The report, “Fraud in Global B2C E-Commerce and Online Payment 2014” shows that as online retail revenue is increasing at double digit growth rates globally, and is expected to total nearly 2 trillion Euros in the next four years, fraud is also increasing. The potential for fraud causes many prospective shoppers to stay away from online sales, and is forcing merchants to establish fraud prevention measures.

The growth of B2C E-Commerce is affected by fraud, as surveys show that more than a third of consumers worldwide who do not yet shop online state that their fear for personal data breach or lack of trust to online payments is the reason. Distrust is especially high in European countries, while consumers in the USA and China have more confidence in the online purchase process. Generally, consumers trust offline payments more than online, and online payments more than mobile. E-Money payments are highlighted as the most trusted online payment method among consumer groups of all ages, while young adults under 35 have the highest trust rates toward the safety of online and mobile payments.

One of the major trends in E-Commerce security is that fraud is expanding beyond payments into account takeovers, which are responsible for an increasing share of total E-Commerce fraud. Multi-channel and pure online merchants such as Home Depot, Neiman Marcus, Target and eBay were occasional targets of account takeover crimes in 2014.

Another major trend is that fraud follows the consumer movement from shopping on computers to the use of mobile devices. The security concerns of merchants and consumers present a challenge to faster adoption and growth of M-Commerce and mobile payments. Over a third of consumers worldwide do not shop or pay with mobile devices because of security concerns, while over half of merchants consider mobile commerce to be riskier than general E-Commerce. It is widely acknowledged that M-Commerce requires tailored fraud prevention tools, such as ID authentication, secure mobile payment methods and device ID.

Cross-border B2C E-Commerce remains the most frequent focus for E-Commerce fraud. Knowledge of fraud profiles of different countries is an important part of the cross-border marketing strategy, as some nations have a much higher likelihood of fraud than the worldwide average.

Fraud in E-Commerce has spawned the growth of the prevention and detection industry. Fraud solution providers with worldwide reach include companies based primarily in the USA and Europe, including subsidiaries of card companies such as Acertify of American Express, CyberSource of Visa and DataCash of MasterCard. A wave of acquisitions ran through the online fraud prevention industry this year, as large payments and online security providers aimed at expanding their E-Commerce fraud prevention portfolios. Payment service and fraud management provider Ogone was acquired by payments company Ingenico Group, while fraud prevention and risk management company Retail Decisions was acquired by banking and payments solution provider ACI Worldwide. Meanwhile, security and fraud solution companies such as TeleSign and TreatMetrix raised multi-million dollar investments in 2014.

Table Of Contents

Fraud in Global B2C E-Commerce andOnline Payment 2014
1. Management Summary

2. Global
-B2C E-Commerce Fraud and Security Trends, 2014
-Major Concerns about Online Shopping, in % of Online Shoppers, May 2014
-Reasons for Not Shopping Online, in % of Consumers who Do Not Shop Online, 2012 and 2013
-Share of Consumers who Do Not Shop Online Because of Personal Data Security Concerns, by Selected Countries, in %, 2013
-Share of Consumers who Do Not Shop Online Because of Lack of Trust to Online Payment Methods, by Selected Countries, in %, 2013
-Payment Methods Perceived to be Safest, incl. Online, in % of Consumers, by Age Group, June 2014
-Share of E-Commerce Merchants Using Consumer Authentication, in %, 2014
-Consumer Authentication Methods Used by E-Commerce Merchants, in %, 2014
-M-Commerce Fraud and Security Trends, 2014
-Reasons for Not Shopping on Mobile, in % of Consumers who Do Not Shop on Mobile, 2013
-Breakdown of Perception of Risk of Mobile Fraud, Compared to E-Commerce Fraud, in % of Merchants, 2013
-Perception of Need of Specific Fraud Prevention Tools for M-Commerce, in % of Merchants, 2012 and 2013
-Major Tools to Prevent Mobile Fraud as Perceived by Merchants, by Rank, 2012 and 2013
-Cross-Border B2C E-Commerce Fraud and Security Trends, 2014
-Top Five Countries Most and Least Likely to Have a Fraudulent E-Commerce Transaction, Q1 2014
-Top Methods Most and Least Likely to Have a Fraudulent E-Commerce Transaction, Q1 2014
-Overview of Selected E-Commerce Fraud Detection Companies, October 2014

3.North America

3.1. North America (Regional)
-Retailers' Revenue Loss to Online Fraud, in USD billion, and in % Average Share of Online Revenue, 2010 - 2012
-Card Not Present Credit Card Fraud Losses, in USD billion, 2011 - 2013

3.2. USA
-Share of Fraud Losses on Total Revenue, in %, by Merchant Types, May 2013 and March 2014
-Breakdown of E-Commerce Fraud, by Fraud Methods, in %, 12 Months to March 2014
-Awareness of Established Fraud Solutions, in % of Large E-Commerce Merchants, March 2014

3.3. Canada
-Card Not Present Fraud Loss in Canada, in CAD million, 2012 and 2013

4.Asia-Pacific

4.1. Asia-Pacific (Regional)
-Top Factors in Online Shopping, incl. Security, in % of Online Shoppers, 2013

4.2. China
-Breakdown of Perception of Mobile Payment Security, in % of Mobile Internet Users, 2013
-Recognition of Mobile Payment Risks, in % of Mobile Internet Users, 2013

4.3. Japan
-Number of Cases where Online Shoppers Required Consultation upon Encountering Fraud Issues with Prepayment in E-Commerce, in Units, 2011-2013

4.4. Australia
-Value of Card Not Present Fraud, in AUD million and in % of Total Card Fraud, 2008 - 2013

4.5. Thailand
-Reasons for Not Shopping Online, in % of Internet Users, 2013 4.6. Malaysia
-Share of Internet Fraud on Total Value of Credit Card Fraud, in % and in MYR million, 2013

5.Europe

5.1. Europe (Regional)
-Payment-Related Reasons for Not Shopping Online More Often, Compared to Other Reasons, in % of Online Shoppers Who Buy Less than Once a Month, by Selected Countries, September 2013
-Concerns about Use of Online Banking and Online Shopping in the EU, in % of Internet Users, March 2012 and June 2013
-Share of Internet Users who are Concerned about Security of Online Payments in Online Banking and Online Shopping in the EU, by Country, June 2013 and March 2012

5.2. UK
-Fraud Losses in Online Card Spending, in GBP million, 2008 and 2012
-Online Card Payment Fraud, in GBP million, by Fraud Against UK-Based Online Retailers and Overseas-Based Online Retailers, 2012 and 2013e

5.3. Germany
-Most Important Factors in M-Commerce, incl. Mobile Payment Security, in % of Online Shoppers, 2013
-Value of Card Not Present Fraud, in EUR million and in % Year-on-Year Change, 2008 - 2013

5.4. France
-Value of Card Fraud in Domestic E-Commerce Transactions, in EUR million, and Fraud Rate, in % of Transactions, 2009 - 2013
-Share of 3D Secure Transactions on Total Online Card Payments, in %, April 2011 - April 2014
-Breakdown of Fraud in Domestic Card Not Present Transactions, by Sectors, in %, 2013

5.5. Russia
-Share of Attempted Fraud Transactions in E-Commerce, by Sector, 2013
-The Share of Actual Fraudulent Transactions on E-Commerce Payments with Cards, 2013
-Breakdown of Online Fraud Losses, by Fraud Type, in % and in USD million, 2011 and 2012
-Value of Card Not Present Fraud, in RUB million and in % Year-on-Year Change, 2008 - 2013

6. Latin America

6.1 Latin America (Regional)
-Annual Value of E-Commerce Fraud and Banking Fraud, in USD million, 2013

6.2. Brazil
-Breakdown of Financial Transaction Fraud Losses, by Offline and Online, incl. E-Commerce, in % and in BRL million, 2013
-Major Concerns about Online Shopping, incl. Online Fraud, in % of Consumers, 2014e

7.Middle East

7.1. Middle East (Regional)
-Reasons for Not Shopping Online, in % of Consumers who Do Not Shop Online, by Middle East and Worldwide, 2013

7.2. UAE
-Breakdown of Perception of the Most Important Factors in Online Shopping, in % of Online Shoppers, 2012
-Breakdown of the Main Reasons to Not Shop Online, in % Consumers Who Do Not Shop Online, 2012

8.Africa

8.1. Africa (Regional)
-Share of Internet Users who Do Not Shop Online Because of Concerns about Safety of Online Payment Transactions, by Selected Countries, in %, January 2014

8.2. South Africa
-Breakdown of Concern Over Providing Credit Card or Banking Information When Shopping Online, in % of Internet Users, 2012

8.3. Morocco
-Reasons Not to Shop Online, in % of Consumers Who Do Not Shop Online, May 2013

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