This overview was first published in ‘eCommerce Insights and Trends Snapshot: Australia’, an eBook produced in association with our partner ACI Worldwide – and based on data from ACI Worldwide. Download your free copy of the eBook below to gain access to a comprehensive analysis of the insights that matter most when measuring the size and type of opportunities in the ecommerce market in Australia.
Australia continues to see strong growth in ecommerce, with online retail growing 13.6% across 2022. While the success story of online card growth outpaces fraud by 8.0% to 5.7%, Card-not-present (CNP) transactions continue to account for 91% of all Australian card fraud. Merchants in Australia and international retailers looking to expand ‘down under’ need to have the correct controls in place to ensure bottom lines are protected – and growth is successful and sustainable.
Whilst online growth has been strong across most channels, this growth does not come without risk. AusPayNet’s fraud mitigation framework has championed fraud prevention over the past four years – bringing Strong Consumer Authentication (SCA) and Risk Based Analytics (RBA) into view for many merchants who wish to avoid fraud basis points of 20 or more. These terms have obligated many Australian businesses to look at online fraud with a degree of seriousness for the first time.
However, the increasing value of card fraud losses to USD 495 million in 2021 highlights that Australian businesses continue to bear the brunt of illicit behaviour. Merchants need to look at implementing both SCA and RBA tools to not only protect against these losses but also use their respective strengths in conjunction with each other to maximise approval rates.
2023 and 2024 could see strong growth in first-and third-party fraud in Australia as consumers battle with the highest growth in interest rates in decades. Fraud has traditionally been cyclical, besides economic downturns and hardships, with criminals taking advantage of the situation, using social engineering to gather personal identifiable information and payment data to steal online goods.
Strong customer profiling, consortium data and machine learning models will be crucial in deterring these behaviours over the coming years. Card testing will also continue to be a scourge in Australia as fraudsters make use of the recent national data breaches before on-selling on the dark web for traditional third-party fraud. The growth in online spending will continue with some optimism in Australia, but merchants should view this with caution, as fraudsters will also seize this growth as an opportunity to ‘hide among the masses’.