PROMOTIONAL RESEARCH
As ecommerce continues to advance, so does the threat of ecommerce fraud, Ping Identity’s Lisa Occleshaw examines how retailers can retaliate
Ecommerce is booming, but so is online fraud. With over 19% of global retail purchases happening online in 2023 – a figure set to exceed 22% by 2027 – fraudsters are taking advantage of the digital shift.
As retailers embrace new opportunities, they must also confront the rising threats of cybercrime to safeguard customer trust and financial security.
Understanding ecommerce fraud
Ecommerce fraud occurs when cybercriminals exploit online platforms to steal funds, products or sensitive data. Two of the most common threats are:
- Account takeover (ATO): Fraudsters gain access to customer accounts using stolen credentials, making unauthorised transactions and stealing personal data.
- New account fraud (NAF): Criminals use fake or stolen identities to create new accounts and exploit sign-up incentives, commit payment fraud or launder money.
Why ecommerce fraud is rising
The rapid increase in online fraud can be attributed to several factors.
Growing digital adoption has expanded the target pool for fraudsters, making it easier to launch large-scale attacks.
Sophisticated fraud tactics, including AI-driven bots and automation, allow criminals to bypass traditional security measures.
Additionally, the globalisation of ecommerce enables cybercriminals to operate across borders, making fraud more difficult to detect and prosecute. As online shopping continues to evolve, retailers must stay ahead of these emerging threats to protect their businesses and customers.
The impact on retailers
Fraud isn’t just a financial burden – it also damages a retailer’s reputation.
Chargebacks, lost revenue and operational disruptions can take a toll, but perhaps more critically, security breaches erode consumer trust.
In an era where customer loyalty is paramount, a single fraud incident can drive shoppers away permanently.
How retailers can protect themselves
Retailers must adopt a multi-layered security approach to prevent fraud without compromising the shopping experience. Here’s how:
- Behavioural biometrics & AI: Using AI to analyse shopping patterns and biometric verification (e.g. facial recognition) can identify suspicious activity early.
- IP and geolocation tracking: Monitoring the location of logins and transactions can help detect unauthorised access attempts.
- Device reputation and fingerprinting: Identifying unique devices used for transactions ensures consistency and flags fraudulent activity.
- Velocity checks: Unusually high transaction volumes from the same account or IP can indicate bot-driven fraud attempts.
- Multi-factor authentication (MFA): Requiring additional verification layers makes it harder for fraudsters to compromise accounts.
Future-proofing ecommerce security
As fraud tactics evolve, so must security measures.
Retailers must invest in fraud prevention technologies while ensuring seamless customer experiences.
Collaboration with cybersecurity experts, leveraging AI-driven fraud detection and educating customers about security best practices will be key to staying ahead.
By prioritising security, ecommerce brands can protect their bottom line while building long-term customer trust in an increasingly digital retail landscape.
Lisa Occleshaw is director UK&I at Ping Identity.
