Blogs

Understanding payment fraud and effective prevention strategies

Since the advent of e-commerce, the ease of committing payment fraud has soared. In this piece, we delve into the definition of payment fraud and explore key fraud prevention strategies.

21 October, 2024
 ·  6 minutes

The closure of physical stores during the pandemic led to a significant surge in online shopping, opening new avenues for fraudsters and subsequently resulting in a spike in payments fraud. In 2021, a staggering 71% of organisations fell victim to payments fraud attacks. In Australia, 45% of businesses say fraudulent transactions and chargebacks were a significant cost for their business.

Technological advancements, while offering convenience, have inadvertently facilitated the increase in payments fraud. One-click payments make it challenging for banks to detect and prevent fraud, and the dark web provides fraudsters with the tools to manipulate the system at a larger scale.

Conversely, technology has also played a vital role in combating fraud. Businesses can now swiftly detect and prevent fraudulent activities, minimising their adverse impact, ultimately boosting revenue and enhancing the customer experience.

While fraud attempts can occur in-store or over the phone, online payment fraud reigns as the most prevalent and fastest-growing. Hence, our focus will be on understanding and mitigating online payment fraud in this piece. But before delving deeper, let's start from the basics.

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