E-fraud down

E-commerce fraud as a percent of sales dollars has declined in many industries, including tobacco, since the first quarter of 2016, according to the latest Global Fraud Index.

Despite the progress, fraud losses still accounts for billions of dollars, and perhaps even more due to transactions declined incorrectly due to fear of fraud.

The Global Fraud Index is compiled by PYMNTS.com and Signifyd.

Each quarter, the index monitors fraud attempts across more than 5,000 global e-commerce merchant websites. Eight main industries were reviewed: alcohol, tobacco and cannabis; apparel; consumer electronics; cosmetics and perfumes; department stores; furniture, appliance and home improvements; health, leisure and hobbies; jewelry and precious metals.

Fraud in each industry is examined across three key categories: friendly fraud, account takeover, and stolen financials. Additionally, each quarter a country is featured and this quarter’s focus is on the United States.

Since early 2016, e-commerce fraud has been declining in most industries, with two notable exceptions: department stores and jewelry and precious metals. One of the main reasons behind this decline is the use of machine learning in fraud-prevention solutions that are raising the bar against a global network of cybercriminals.

These machine-learning solutions are doing a better job than previous solutions, which relied on static rules, of distinguishing real orders from fraudulent ones. The resulting decrease in total fraud from the first quarter of 2016 to the first quarter of 2017 was 34.7 percent.

The Global Fraud Index™ is one of a series of industry indexes produced by the PYMNTS data and analytics team. They have developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem.