A new report finds every dollar of fraud in 2016 cost merchants $2.40, up from $2.23 a year ago.
According to the LexisNexis 2016 True Cost of Fraud report, the volume of fraud has risen sharply in the last year—from a monthly average of 156 to 206 successful fraudulent transactions, and from 177 to 236 prevented fraudulent transactions—while the level of fraud as a percentage of revenues has also inched upward from 1.32% to 1.47%.
A core feature of the report is the LexisNexis Fraud Multiplier.
LexisNexis says the values represent a moving target—the opportunities for retail fraud become ever more abundant as new access channels and payment methods, including mobile wallets, the U.S. EMV rollout, and digital channel applications make the payment and regulatory landscape ever more complex for merchants.
Three other findings:
1.Chargebacks remain high among remote channel merchants and small domestic merchants, with a 49% increase, for example, among eCommerce merchants.
2. Credit cards remain the most common method of payment for fraud—41% to 63% across all merchant categories—presenting a particular challenge to mobile commerce merchants.
3. The percent of revenue lost to fraud continues to increase, hitting mCommerce and international merchants the hardest at 1.69%.
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