Annual online payment fraud losses from e-commerce, airline ticketing, money transfer and banking services will reach $48 billion by 2023; up from the $22 billion in losses projected for 2018, according to a new report from Juniper Research.
The report – Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2018-2023 – claimed that a critical driver behind these losses will be the continued high level of data breaches resulting in the theft of sensitive personal information.
Juniper claimed that fraudsters are using information gleaned from these breaches to move away from pure identity theft, instead using fragments of real data to create new, synthetic identities.
With the global rise in instant payment schemes and a focus on transactional rather than behavioral risk, Juniper forecasts that money transfer would be particularly vulnerable, with fraud losses increasing by over 20% per annum to $10 billion in 2023.
“Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioural giveaways that indicate this type of fraud,” said research author Steffen Sorrell. “Fraud management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up,”
Omnichannel fraud prevention
Meanwhile, Juniper predicted that techniques practiced by the Magecart and Fin7 groups would become more common as fraudsters seek to create products from their knowledge. Here, the groups used a combination of malware and cross-channel approaches for criminal gain. As a result, more complex fraud will only become more common as, in effect, a ‘fraud-as-a-service’ economy emerges.
Consequently, the report recommends a holistic approach to fraud prevention. The procurement of omnichannel fraud prevention services and a strategy to assess and mitigate risk from a cybersecurity perspective will be critical for effective fraud prevention in the near to medium-term.