Security News > 2022 > March > Fraud detection and prevention costs merchants more than fraud itself

European merchants spent nearly €7 billion on fraud detection and prevention in 2021 alone - more than three times the value lost to fraud in the same year, CMSPI estimates.

These practices are unsustainable for the continent's merchants, who are currently facing compound annual fraud growth of 1.5%. As retailers' margins are squeezed, fraud and its wider impacts are just another inflationary pressure that see merchants and good customers losing out.

"As the digital and brick-and-mortar store environments merge, merchants are facing a new fraud landscape with new sets of challenges," said Toby McFarlane, Head of Ecommerce for CMSPI. "Often merchants think they must choose one solution over another, but a targeted fraud strategy isn't an either/or situation. It is important for merchants to have a sophisticated understanding of their payments profile to address their major threats and balance risk."

Approaching the fraud question can be highly complex, with many merchants caught between excessively strict fraud rules that turn legitimate customers away or boosting sales whilst making themselves vulnerable to attacks.

To tackle each threat, it is crucial for merchants to strike a balance between fraud losses, fraud prevention costs, and lost sales.

Every business is unique and, as the fraud landscape shifts, merchants need to find the right partners to fit their needs, keeping abreast of the latest tools and solutions to build a strategy fit for the long run.

News URL

https://www.helpnetsecurity.com/2022/03/08/merchants-fraud-threat/