Boston, MA, USA, December 18, 2000
? Report Published by Celent
Online Payment Fraud to Cost e-Merchants US$300 million this Holiday Season and Increase Rapidly
In a new report released by Celent Communications, entitled "Online Payment Fraud: The Grinch that Stole e-Christmas?," Celent examines the current level of fraud perpetrated at virtual storefronts in the US. Celent estimates that cyber merchants are experiencing fraud rates that are 30 times higher than their bricks-and-mortar counterparts. During this holiday season alone, online stores will loose $300 million to fraudulent transactions, equal to three percent of e-commerce sales.
"Today, merchants must absorb the large majority of these losses, a significant burden to merchants struggling to be profitable," comments Meredith Hickman, author of the report. "In the short term, we expect to see more and more retailers turn to score-based solutions to help detect fraudulent transactions. However, we expect to see credit card associations and member banks come to the rescue with a workable solution that reaches the critical mass within 3-5 years." The report compares a host of fraud detection and protection solutions available on the market, including the failed SET initiative, new three domain (3D) initiatives, score-based models, smart cards, and biometrics. It also examines the likely evolution for combating online payment fraud. A Table of Contents is available online.
Members of Celent Communication's Retail Banking research services can download the report electronically by clicking on the icon to the left.