Web merchants say international fraud rates fell to 2% in 2009, study says
U.S. and Canadian merchants say the percentage of their orders from abroad rose to 21% in 2009, up 24% from 17% in 2008, CyberSource Corp. says in the “11th Annual CyberSource Survey of eCommerce Fraud—2009.”
CyberSource, which will be exhibiting at the Internet Retailer Conference & Exhibition 2010, conducted the survey in September and October.
The international growth dovetailed with fraud rates on international orders dropping from an average of 4% in 2008 to 2% in 2009. The domestic rate was 0.9%. The percentage of international orders that were rejected for suspicion of fraud fell 29% from 10.9% in 2008 to 7.7%. The domestic percentage was 1.2%.
Overall, merchants reported their online revenue loss due to fraud to be $3.3 billion, an 18% dip from 2008 when losses were estimated at $4 billion.
“We see this as a meaningful trend in e-commerce—real evidence of increasing globalization,” says Doug Schwegman, CyberSource’s director of customer and market intelligence. “We think the trend was driven in part by merchants’ needs to find new sources of revenue in a challenged economy, but also by merchants’ growing ability to manage fraud on international orders.”
To prevent fraud, 20% of the surveyed merchants stopped accepting orders from at least one country due to high fraud levels. Among merchants that stopped accepting orders, 50% blocked orders from Nigeria, 45% rejected orders from Ghana and 30% rejected orders from Indonesia and Malaysia.
For domestic orders, the survey found that 33% of merchants said that orders stemming from New York had the highest risk of any U.S. or Canadian city. 19% cited Miami and 10% said Los Angeles.
Paul Brock, CyberSource principal, will be speaking at the Internet Retailer Conference & Exhibition 2010 in a session entitled Criminals get slicker—and e-retailers will need to keep up.
