Irina Ionescu, Senior Editor at The Paypers, discusses the key takeaways of Sift’s latest Q1 2025 Digital Trust Index on payment fraud and its rise amid digital transformation, highlighting trends, statistics, and customer behaviours.
According to Sift, the global economy is on the cusp of a second-wave digital transformation, fuelled by changing consumer habits and advancements in AI. Businesses now face a broader range of risks, as new digital fraud patterns emerge. Amid this revolution, a new report from Juniper Research claims that fraud expected to rise from USD 44.3 billion in 2024 to USD 107 billion in 2029, showcasing the threat all businesses, offline and online, now face.
Payment fraud remains at the top of concern for business owners, especially when it comes to automation, card testing, as businesses saw up to 9% in revenue lost due to fraud.
As detection tools have become stronger, fraudsters look for new ways to commit dagame, which is why in the past couple of years we have seen heightened account takeovers, social engineering, and Fraud-as-a-Service schemes.
Key takeaways
Payment fraud trends
- Ecommerce fraud expected to rise from USD 44.3 billion in 2024 to USD 107 billion in 2029, showcasing a 141% increase.
- In 2024, the overall average payment fraud attack rate was 3.3%.
- The ticketing and reservations industry saw an 85% rise in attempted payment fraud YOY, reaching a 7.4% attack rate. Similarly, the financial and fintech industry has seen a 90% increase Year-over-Year in attempted payment fraud rate in 2024 as opposed to the previous year.
Industries affected
- Ticketing and reservations, social media, and transportation are among the most targeted industries
- Online travel agencies and B2C SaaS experienced significant year-over-year increases in attempted payment fraud rates.
Payment types vulnerable to fraud
- In 2024, loyalty points, financing, and prepaid cards had the highest fraud attack rates.
- Points from reward programmes were also frequently targeted due to perceived lax monitoring which could trigger fraudsters to commit more account takeover and theft attempts.
- Digital financing options faced fraud due to weak identity checks and rapid approval processes.
Card issuer fraud rates
- Mastercard had a fraud attack rate of 1.5%, while Visa had 1.14%, and Discover 0.63%.
- Major issuers actively combat fraud, maintaining lower attack rates.
Consumer experiences with fraud
- According to a Sift survey, 44% of consumers have been victims of payment fraud in their lifetime, with their payment information being used by someone else to make or attempt to make unauthorised purchases.
- Online shopping sites are the most common platforms for fraudulent transactions, but fraudulent transactions can occur on nearly any app or website.
Payment method preferences
- Credit cards remain the most used payment method, with digital wallets and Buy Now, Pay Later (BNPL) services gaining popularity.
- Digital wallet ownership is projected to grow by 15.3% by 2029.
Consumer awareness of fraud
- More and more consumers seem to actively choose to participate in fraud online, with 34% of them doing so, up from 18% in 2023.
- 23% know someone who has participated in payment fraud or have personally participated in a type of fraud involving stolen payment information or coordinating with other users to obtain free or discounted services, abusing promotions from websites.
- Consumers also use unofficial channels like online forums, chatting groups, or messaging apps to commit coordinated promo abuses.
Generational differences in fraud participation
- Younger generations (Gen Z and millennials) are more likely to use alternative payment methods and engage in fraudulent activities.
- 48% of Gen Z have seen offers to participate in payment fraud online.
Business responsibility in fraud prevention
- 68% of consumers would stop shopping on a site where they experienced payment fraud.
- Consumers believe businesses and financial institutions should be responsible for protecting payment information.
Conclusions
According to Alexander Hall, Trust and Safety Architect at Sift, businesses now have unprecedented access to data yet lack the necessary tools to accurately assess their users’ trustworthiness. Payment fraud continues to pose a significant threat to online businesses and their reputation, so it takes cross-dimensional identity intelligence to combat fraud and streamline growth and further international expansion.
Are you interested in reading more? Make sure to download the full Sift report and browse through it to find more stats about digital payments, payment fraud, and consumers’ behaviour online and their threats to business legitimacy.
About the author
Irina is a Senior Editor at The Paypers, primarily specialising in online payments and fraud prevention. She has a Ph.D. in Economics and a strong economic academic background, with interests in fraud prevention, chargebacks, fintech, ecommerce, and online payments. Reach out to her via LinkedIn or email at irina@thepaypers.com.
About the company
Sift is the leader in Digital Trust & Safety, empowering digital disruptors to Fortune 500 companies to unlock new revenue without risk. Sift dynamically prevents fraud and abuse through industry-leading technology and expertise, an unrivalled global data network of one trillion events per year, and a commitment to long-term customer partnerships. Global brands such as DoorDash, Poshmark, and Twitter rely on Sift to gain a competitive advantage in their markets.
