As European ecommerce continues to evolve, merchants face a dual challenge: preventing fraud while delivering seamless payment experiences. Deborah Powell, Enterprise Account Manager at Riskified, and Riverty’s BNPL Product Lead, Alex Scheibel, shared valuable insights on payment authentication optimisation and addressing emerging fraud threats in the European market.
Becoming an integral part of the European payments landscape, the BNPL market is projected to reach USD 300 billion by 2030. Alex Scheibel highlighted that 47% of existing BNPL users increased their usage in 2024. Market penetration varies significantly across Europe, with countries like Sweden and Germany showing high adoption rates (≈25% market share) while others like Denmark maintain lower usage levels. The success of BNPL is largely attributed to its ability to build trust between consumers and merchants, particularly for online discoveries through social media platforms.
Deborah Powell emphasised that ecommerce fraud is becoming increasingly sophisticated, with projected costs reaching USD 200 billion between 2021 and 2025. Key fraud patterns include account takeovers, shipping fraud, and friendly fraud through item-not-received claims. Additionally, merchants face challenges with promo code abuse, refund abuse, and wardrobing – where customers purchase items for temporary use before returning them. The dark web has become a marketplace for fraud techniques, with individuals offering services to circumvent merchant policies.
The experts stressed the importance of selective friction in the customer journey. Modern fraud prevention requires a sophisticated approach combining device recognition, contextual awareness, and behavioural biometrics. The upcoming Consumer Credit Directive (CCD2) will introduce new requirements for BNPL providers, including improved customer authentication and transparency measures, though specific thresholds remain under discussion.
BNPL adoption varies significantly across Europe, with merchants seeing 20% increased conversion rates and 11-14% higher average order values when implementing these payment options;
Effective fraud prevention requires a holistic approach, including collaboration with logistics partners and analysis of customer behaviour patterns;
Identity clustering and linking technologies help merchants identify and prevent sophisticated fraud attempts across multiple accounts;
Cultural differences across Europe significantly impact consumer expectations for payment authentication and friction tolerance;
The upcoming CCD2 regulation will require BNPL providers to implement stronger customer authentication measures while maintaining user experience.
Success in European ecommerce payments requires a delicate balance between robust fraud prevention and frictionless customer experiences. Merchants must adopt sophisticated fraud prevention technologies while considering regional variations in consumer behaviour and regulatory requirements. By understanding their true fraud costs and implementing targeted authentication measures, businesses can better protect their bottom line while maintaining customer satisfaction.
Vlad is a Senior Editor at The Paypers, working in the Banking & Fintech team. He uses his research, content, and people skills for all activities revolving around Open Banking and Open Finance. Vlad has a degree in Biology and Molecular Genetics and an extensive background in creative writing. You can reach out to him on LinkedIn or email.
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