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Ecommerce Merchants See Drop In Fraud Rates
Mike Sachoff
Staff Writer
2010-02-22
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Online payment processing firm CyberSource has released it 11th annual Online Fraud Report, which highlights shifts in global online sales and fraud management.
 | | Ecommerce Merchants See Drop In Fraud Rates |  |
This year's survey of ecommerce merchants found that among U.S./Canadian merchants accepting international orders, 21 percent of their online orders came from abroad, up 17 percent from the year before and 8 percent in 2005. The steady growth is supported by progress in meeting the increased fraud challenge of international orders, with a 50 percent lower fraud rate and 30 percent lower or rejection rates.
"We see this as a meaningful trend in eCommerce - real evidence of increasing globalization," said Doug Schwegman, CyberSource's Director, Customer and Market Intelligence.
"We think the trend was driven in part by merchants' needs to find new sources of revenue in a challenged economy, but also by merchants' growing ability to manage fraud on international orders."
U.S./Canadian merchants say they saw fraud rates (accepted orders that turned out to be fraudulent) on international business drop 50% in 2009-from an average of 4% in 2008 to 2% in 2009 (this compares to 1.2% on orders with domestic origins). International orders that were rejected due to suspicion of fraud dropped 30% in 2009, from 10.9% to 7.7%.
"These global numbers may be higher than their domestic equivalents, but clearly, more merchants now feel they have the controls in place to better control the risk," said Schwegman.
The report found 20 percent of U.S. and Canadian merchants that take orders from abroad stopped accepting orders from at least one country due to high fraud levels in 2009. Among that group, half cited Nigeria and 45 percent cited Ghana. Other countries high on the list included Indonesia and Malaysia (30% each), Iran, Pakistan, Romania and Russia (23% each), and China and Vietnam (20% each).
The survey also highlighted areas of fraud in North America. Thirty-three percent of merchants said New York represented the highest risk of any U.S. or Canadian city when accepting domestic orders. Among Canadian cities, 4 percent of merchants said Montreal and Toronto each represented the highest risk of online fraud.
About the Author:
Mike is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.
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