Artificial Intelligence (AI) is fuelling the sophistication of attacks across the electronic commerce or ecommerce ecosystem with the use of deepfakes to defeat verification systems being a key threat, according to findings by Juniper Research, the foremost experts in financial technology (fintech) and payment markets.
Juniper Research said that this threat, combined with rising levels of ‘friendly fraud’, where fraud is committed by the customer themselves, such as refund fraud, is increasingly threatening merchant profitability.
The report estimates that the value of ecommerce fraud will rise from $44.3 billion in 2024 to $107 billion in 2029, a growth of 141 per cent.
An extract from the new report, Global Merchant Fraud Prevention Market 2024-2029, said AI is enabling fraudsters to remain ahead of security measures and commit sophisticated attacks on a greater scale.
By creating credible messages and a large number of synthetic identities, AI is facilitating higher quality attacks with an unprecedented frequency. These technologies are also highly scalable; empowering fraudsters to heavily automate their attacks and overwhelm rules-based prevention systems.
“Ecommerce merchants must seek to integrate fraud prevention systems that offer AI capabilities to quickly identify emerging tactics. This will prove especially important in developed markets, where larger merchants are at higher risk of being targeted for fraud, such as testing stolen credit cards,” report author Thomas Wilson said.
Merchants are employing these same technologies to recognise emerging fraud patterns and react in real-time.
Merchants must work to incorporate biometric identification into checkout processes to further secure transactions.
By using methods such as liveness detection, merchants will be able to protect their business and customers from increasingly sophisticated AI deepfake fraud attempts.
The new market research suite offers the most comprehensive assessment of the merchant fraud prevention market to date; providing analysis and forecasts of over 25,000 data points across 60 countries over five years.
It includes a ‘Competitor Leaderboard’ and examination of current and future market opportunities.
Juniper Research has for two decades provided market intelligence and advisory services to the global financial sector and is retained by many of the world’s leading banks, intermediaries and providers.
