Online Payment Fraud will Reach $202 Billion by 2024
The digital payment era is here. Record numbers of online payments are being processed. And, nearly half the world will be using digital wallets by 2024, with transaction values to increase by almost 60 percent reaching over $9 trillion, according to the latest worldwide market study by Juniper Research.
Moreover, the greater financial services sector is in the midst of a payments revolution. The increased convenience of digital solutions is driving more eCommerce engagement. However, it has also created an environment for cybercriminals that are intent on circumventing IT security measures.
Payment Fraud Prevention Market Development
Understanding the current digital payment threat landscape is crucial to the development of reinforced protections while keeping fintech innovation clear of exploitation by organized criminals.
Organizations with commercial transactions that are dependent on eCommerce — such as airline ticketing, money transfer and banking services — will cumulatively lose over $200 billion to online payment fraud between 2020 and 2024. The ongoing losses will be driven by the increased sophistication of international criminals and the rising number of potential attack vectors.
Juniper Research found the increasing ubiquity of digital payments provides a virtual haven for fraudsters. Their analysts recommend that payments industry stakeholders focus on an omnichannel fraud approach to mitigate these security challenges.
This approach must encompass both strict cybersecurity at access points, as well as intelligent analytics such as artificial intelligence and machine learning, to identify fraudulent behavioral patterns.
The worldwide market study found that machine learning has become a crucial tool in the fraud detection and prevention arsenal, as it enables CIOs and CTOs in the payments industry to analyze transaction flows in a holistic way, unlocking hidden insights on fraudulent behaviors.
The incorporation of machine learning into fraud detection and prevention software will drive spending forward, reaching $10 billion in 2024 — that’s a 15 percent increase over 2020.
“The rapidly evolving nature of payment fraud and increased sophistication in attack methods require machine learning adoption at scale, in order to minimize risk. Constant innovation in analytics and data models is increasingly essential to constraining fraudulent behaviors in payments,” said Nick Maynard, lead analyst at Juniper Research.
Outlook for Ongoing Payment Fraud Growth
The research also found that digital money transfer is a growing area for payment fraud, with losses growing by approximately 130 percent from 2020 to 2024. Digital money transfer fraud is prevalent in emerging markets, with payments vulnerable to SIM swapping fraud and synthetic identities.
These markets typically have less robust security measures in place. According to the Juniper assessment, that’s why ongoing Know Your Customer (KYC) verification, including events-based re-verification following onboarding, are elements that are essential to secure the rising levels of digital transactions.
Originally published at https://blog.geoactivegroup.com.