The dire predictions come from Juniper Research which says that businesses in eCommerce, airline ticketing, money transfer and banking services, will cumulatively lose over $200 billion to online payment fraud between 2020 and 2024.
The new research - Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2020-2024 - found the increasing ubiquity of digital payments provides an ever-increasing attack surface for fraudsters, and recommends that payments industry stakeholders focus on an omnichannel fraud approach to mitigate these challenges.
According to Juniper, this approach must encompass both strict cybersecurity at access points, as well as analytics such as machine learning, to identify fraudulent behavioural patterns.
The new research found that machine learning has become a crucial tool in the fraud detection and prevention arsenal, as it enables payments industry stakeholders to analyse transaction flows in a holistic way, unlocking hidden insights on fraudulent behaviours.
The research says that the incorporation of machine learning into fraud detection and prevention software will drive spending forward, reaching $10 billion in 2024, a 15% increase on 2020.
“The rapidly evolving nature of payment fraud and increased sophistication in attack methods requires machine learning adoption at scale, in order to minimise risk,” said research co-author Nick Maynard.
“Constant innovation in analytics and data models is increasingly essential to constraining fraudulent behaviours in payments,” Maynard warned.
The research also found that digital money transfer is a growing area for payment fraud, with losses growing by 130% from 2020 to 2024.
According to Juniper, digital money transfer fraud is particularly strong in emerging markets, with payments vulnerable to SIM swapping fraud and synthetic identities, with less robust security measures in place.
And the research recommends that ongoing KYC (Know Your Customer) verification, including events-based re-verification following onboarding, are elements that are essential to secure the rising levels of digital transactions.