Highest Percentage of Fraud Occurs with the Highest-Priced Goods
Online payments provider 2Checkout just released their first quarterly Fraud Index and the report doesn't paint a very rosy digital picture.
2Checkout found that the highest percentage of fraud occurs with the highest-priced goods with transaction values over $400 exhibiting fraud rates 35% higher than average. By product category, the highest global fraud rates involve cable, satellite and pay television, demonstrating more than 4 times the average fraud rate. Home furnishings, needlework products, and books experience the lowest fraud rates by product category, with one tenth of the average fraud rate.
Geographically, the lowest fraud rates in the world are found in the Nordic countries (Denmark, Finland, Norway) and Belgium; the highest are in Indonesia, Pakistan and Romania. Rates between high fraud and low fraud countries can vary by as much as 1000%.
“As merchants seek sales growth by expanding internationally and selling into emerging growth markets, they will encounter fraud. I won’t hazard a guess as to why pay TV and Indonesian purchases are so rife with fraud, but fortunately there are ways to detect it before damage is done,” said Daniel Greenberg, acting chief marketing officer for 2Checkout.
“While most payments vendors simply check CVV codes, we have 300-plus heuristics and some clever network intelligence to actively monitor and stop fraudulent transactions before they occur. This has provided us with some unique insights into the market. We wanted to share these with the public so that others may benefit.”