Online Fraud Detection And Prevention Bill Will Hit $9.3 Billion by 2022, Says Juniper

With a rapidly expanding e-commerce market, online fraud-detection and -prevention efforts are poised to grow over the next few years. Merchants are expected to spend $9.3 billion annually on these efforts by 2022, says Juniper Research. That’s a 22% increase from the 2017 spending total, though it pales in comparison to the estimated $71 billion in fraudulent card-not-present transactions that will hit merchants globally over the next five years, Juniper says.

The “Online Payment Fraud: Emerging Threats, Key Vertical Strategies & Market Forecasts 2017-2022” report released Tuesday by the United Kingdom-based Juniper suggests that services that automate fraud detection and new technology will fuel part of this growth. Many efforts will focus on securing payments made with Internet of Things-enabled devices, such as appliances and vehicles.

The implementation of 3-D Secure 2.0, an online fraud-prevention protocol, could spur spending if merchants adopt it. Other factors that could influence merchant spending patterns include services that incorporate machine learning, biometrics, and the rise of malware.

Machine learning fraud-prevention services could be more sought-after as merchants attempt to reduce their reliance on rules-based systems, Juniper says. Such services can evaluate the potential validity of a transaction using multiple data sources in real time.

A key component to countering online fraud is authenticating the consumer. That’s where multifactor techniques, which can incorporate biometrics, may attract merchant interest. Some providers offer services that can detect the angle at which a consumer holds a mobile device or how much keyboard pressure she uses. “These types of authentication are exceedingly difficult to mimic,” Juniper says.

And malware will continue to be a scourge, requiring detection and prevention programs. While traditional efforts to detect malware, including analyzing files or memory code to detect malware signatures, have been effective, that may not be true 100% of the time in coming years.

“However, the situation is such that the ability of signature detection anti- malware solutions (where signatures are updated manually) is unable to keep up with the changing malware landscape. Meanwhile, techniques have evolved to obfuscate signatures by disguising function calls and other code behind encryption or other methods,” Juniper says.

Meanwhile, consumers also have concerns about payments security and data theft. Eighty-five percent of U.S., U.K., and Australian consumers say that the number of criminals trying to steal their credit and debit card data is increasing, finds the “Consumer Payment Card Data Security Perceptions” report released by Transactions Network Services Inc. Tuesday.

Among other findings is that fewer consumers trust in-store payments versus online or telephone payments. In 2017, 55% say they felt their card data was more secure in-store than online or over the telephone, compared to 57% in 2015. In the United States, 49% say in-store payments were more secure this year.

Additionally, 66% of U.S. consumers hold retailers, instead of their bank or card brand, responsible for protecting their card data when they make a purchase.