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Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – Securing E-Commerce: Competing Technology Crowds the Market
- 90% of retailers use at least two fraud mitigation tools – Fed Reserve Bank, Minneapolis
- But these tools are antiquated: 76% of retailers use CVV code – 73% use shipping address
- 70% of retailers with annual sales below $100 million do not share information with partners to fight fraud
- Only 30% of retailers under $100mm in sales plan on bolstering their fraud initiatives
- Smaller merchants are either complacent or feel helpless – because 77% expect fraud to increase
- In contrast, 67% of retailers >$1.5 billion in sales are “extremely worried” about fraud
About this report
The growth of e-commerce has commanded billions of dollars in investments from credit card companies, merchants, banks, and venture capitalists. This future however, has gone relatively unsecured. Despite usage spikes for e-commerce and especially mobile commerce, no amount of investment has yet corralled e-commerce fraud. The rise of card-not-present transactions has been paralleled by spikes in declined transactions, chargebacks, bot attacks, and fraudulent transactions. A new research report from Mercator Advisory Group titled Securing E-Commerce: Competing Technology Crowds the Market details the nature of the current state of e-commerce fraud, the options for securing it in the short and long term, and some scenarios for e-commerce security. The report makes the case that the EMVCo consortium and other potential technology entrants need to plan for a more sensibly sustained roll-out of technologies that consider merchants and banks more formidably in the process of fighting e-commerce fraud.
“The gauntlet has been thrown for 2019 for securing e-commerce. While the industry tries to solve e-commerce security issues, in many senses it is getting in its own way. EMVco, which has made strides in card-present fraud, is preparing new technologies for e-commerce. The most promising of these is 3-D Secure, version 2.0 (3DS2), an upgrade of current authentication technology, which is a significant upgrade over the original protocol 3-D Secure (3DS) from the global card network consortium EMVCo that could impact e-commerce and m-commerce fraud frequency and the negative costs associated with it. Yet, credit card companies are preparing a more aggressive upgrade called Secure Remote Commerce on its heels. Banks and merchants will have a stake in securing e-commerce, but may be confused by rapid-fire roll-outs from EMVco,” comments the author of the report, Tim Sloane, Vice President, Payments Innovation, and Director, Emerging Technologies Advisory Service, at Mercator Advisory Group.
