Thursday, January 25, 2007

Online Fraud

We all know that online revenue is going up and up and up, but what’s happening with online fraud? In 2006 revenue lost in online fraud was at an all-time high of $3 million, up from $2.8 million in 2005 and $1.5 million in 2000 in North America


The good news is the actual percent of online fraud seems to be going down. In 2006 1.4% of revenue was lost to online fraud, down from 1.6% in 2005, as reported today in emarketer.com http://www.emarketer.com/Article.aspx?1004504&src=article2_home

What I had no idea was that e-merchants are rejecting about 4% of orders because of suspected fraud. However, since only about 1% is fraudulent, how much revenue is lost from rejecting real orders? More is being lost in cautious rejection than in actual fraud. What will be the next innovation to ensure merchants aren’t losing valid orders?

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