The value of online fraudulent transactions is expected to reach $25.6 billion by 2020 from $10.7 billion in 2015.
$4 in every $1,000 of online payments will be fraudulent, said Juniper Research in its study called Online Payment Fraud: Key Vertical Strategies & Management 2016-2020.
The implementation of CHIP and PIN services at POS (Point of Sale) locations in the US is likely to be a key factor driving activity in the online fraud space. Security afforded by CHIP and PIN would persuade fraudsters to switch their attention from the in-store environment to the CNP (Card Not Present) space.
3 hot areas for online fraud
eRetail (65 percent of fraud by value in 2020 – $16.6 billion)
Banking (27 percent – $6.9 billion)
Airline ticketing (6 percent – $1.5 billion)
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.
Continuing migration to online and mobile shopping, of both digital and physical goods — reaching over $1.7 trillion in 2015 — will provide a further incentive for fraudsters to focus their attention on these channels.
Though 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.
While efforts by the airline industry to deploy sophisticated Fraud Detection and Prevention (FDP) systems has reduced fraud 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 percent or 10 basis points of revenues.