Online merchants lost $4 billion to fraud in 2008, according to consumers surveyed in December 2008 by Mindwave Research for CyberSource. The rate of fraud was the same as it has been since 2006, but e-commerce is still growing, so the fraud rate resulted in more lost dollars.
“For years, US e-commerce merchants have fought fraudsters to what amounts to an annual standoff,” said Doug Schwegman, director at CyberSource, in a statement.
CyberSource said merchants had to accept more charges lest they turn away sales in tough economic times. This did not mean fraudsters had outwitted online merchants to a greater degree than in prior years.
In fact, order rejection rates due to suspicion of fraud, which have been consistent for several years at around 4% of incoming orders, dropped from 4.2% in 2007 to 2.9% in 2008. This means merchants accepted a higher percentage of the orders they received. CyberSource said falling rejection rates accompanied by steady fraud rates meant merchants were better in 2008 at fighting fraud.
On the consumer side, 85% of US Internet users surveyed in September 2008 by VeriSign said being able to trust Websites with their confidential information was the most important factor when transacting online.
More than nine out of 10 respondents also said they would not make purchases at unsecure sites. About 20% said they did less online shopping and other activities because of security concerns.
One-third of consumers said it would take discounts of 30% or higher to get them to consider shopping at unsecure Websites.
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