The eCommerce industry has dramatically expanded in Europe, creating a shift from in store purchases to digital and online sales.  With that increase in online transactions and sales; new opportunities for fraudulent activity are slated to increase.

The issue with this rise in the European eCommerce culture is that there is no plan implemented to handle and maintain security for the consumer or specifically the merchant.  Europol suggests that victims of internet fraud reportedly lose an estimated 290 billion each year worldwide, proving that cyber crime encompasses the profit of crimes such as the drug trade (Europol). 

Merchants of all sizes were greatly affected by fraudulent transactions through online channels over the past year. According to LexisNexis’s “The True Cost of Fraud” Report for 2013, small, medium, and large merchants all experienced increases in fraud through online transactions (LexisNexis). 

  • Medium sized merchants were affected the most, rising from 30% of fraudulent transactions resulting from their online channels in 2012, to 51% in 2013.
  • Large merchants were also affected in a significant way, rising from 32% in 2012, to 45% in 2013.

According to the report, large merchants are 35% more likely to accept online forms of payment than all merchants combined. (LexisNexis)

Small merchants, who are least likely to accept online payments, have also experienced an increase in online fraudulent transactions, rising from 45% in 2012, to 52% in 2013. No merchants who accept online payments are entirely protected from fraud.

The rise of online fraud may have an indirect correlation to the rise of alternative payments fraud.   Both types of fraud experienced sharp declines in 2012 but rebounded significantly in 2013 (LexisNexis). Larger eCommerce companies facilitate fraud technology solutions at a faster rate compared to their smaller foil which leaves small and medium sized merchants more susceptible to higher percentages of online fraud.  In a very competitive on-line retail world, merchants need to be able to move fast and change quickly to respond to the increasing “friendly fraud” or “Cyber Shoplifting”. This is an $11.4 billion cost to merchants so whether you are running a global enterprise or a small business, mitigating against this risk is a complex responsibility and not something that can be done alone. Global Risk Technologies™ can help you manage that implied risk and let merchants retain that competitive advantage.