Merchants spent nearly €7 billion on fraud detection and prevention in 2021: Fraud itself costs less
CMSPI reveals European merchants spent nearly €7 billion on fraud detection and prevention in 2021, which is more than three times the value lost to fraud in the same year.
Online payment fraud has plagued merchants the most. Throughout January alone, merchants saw over 600 million chargebacks from sales made during the holiday season. Alongside an increase in absolute volumes, the types of fraud merchants face are rapidly shifting too, with threats such as refund fraud coming to the forefront for omnichannel retailers.
The results are overly aggressive fraud rules that often turn legitiame customers away. It’s therefore crucial for merchants to strike a balance between fraud losses, fraud prevention costs, and lost sales.