While the types of fraud attacks affecting online merchants have grown significantly in type and frequency over the past few years, online marketplaces selling physical goods and services are still most concerned with traditional online payment card fraud, according to a new report. A survey by U.K.-based antifraud technology provider Ravelin shows 81 percent of marketplaces rank payment card fraud as one of their most significant threats.
Account takeover fraud, which has been an issue for online companies for more than a half decade, was rated as a primary threat by rideshare apps (79 percent) and food delivery services (74 percent) more than it was by marketplaces that sell third-party physical goods (69 percent).
The Ravelin report, titled Online Marketplace: Fraud Trends 2021, highlighted how different types of online merchants have different fraud concerns and must tailor fraud prevention efforts around those specific concerns.
“By their very nature, online marketplace organizations make themselves a hot target for fraudsters—both on the buyer side and on the supplier side. Managing and mitigating all these risks can therefore be a tall order, especially as these organizations tend to process tens of thousands of low-value, in-the-moment payments every day,” said Martin Sweeney, CEO of Ravelin. “And while using fraud detection technology is clearly the right way to mitigate threats, I can’t overstate the vital role that humans must play in fraud detection as well. The most effective fraud detection ecosystems comprise a combination of data and human insight and oversight because technology is only as good as the instructions it is given.”