Large sized ecommerce merchants face higher fraud costs than smaller outlets

Many of the higher fraud volumes that have been reported can be attributed to less than optimal approaches that ecommerce organizations have taken in fraud identification and prevention. For instance, many merchants do not adequately track prevented versus successful fraudulent transactions, which would help them better manage and fight fraud.

While nearly half of mid/large sized merchants track fraud costs by both channel and payment method, there is still a sizable portion that do not. This weakens their ability to fully identify and manage weak points in their protection efforts.

Smaller ecommerce merchants, with less than USD 10 million in annual sales, are actually more at risk than their larger counterparts. These smaller merchants pay USD 2.38 in costs for every dollar of fraud they intake, and also see 48% of their monthly transactions come in as fraudulent.

The methodology of the 2017 True Cost of Fraud study targeted US ecommerce companies with a survey of 190 risk and fraud executives, conducted during March and April 2017. Respondents represented all channels, company sizes, industry segments, and payment methods.