Payment methods most affected fraud

With the sheer volume of 2.2 million reports submitted to the Federal Trade Commission (FTC) in 2020, the current state of fraud across e-commerce is substantial. Understanding its effects across the industry is in theory a decent way to control how fraud may affect your business. However, the volume and variety of these different factors make analyzing them a huge undertaking. The simplest way to recognize and attack scams affecting your business is by identifying the payment methods most affected by fraud.

The Merchant Advisory groups primary data service, Fraud Experience Payment Insights, examines United States consumer payments and identifies theft-related fraud. Their 2022 Payment Fraud Report lists these five as the top afflicted payment methods.

Top Five Payment Methods Affected by Fraud:

• 42% – Credit card
• 39% – Debit card attached to a checking account
• 22% – Online banking
• 12% – Debit card issued by a peer-to-peer payment service
• 8.3% – Peer-to-peer payment service

The top three affected methods listed are also some of the most common payment types in the e-commerce industry. In contrast, obscure alternative payment methods like investment brokerage debit cards, digital wallets, and crypto, are the least used and least effective. (1) Overall, popular payment methods with a larger volume of transactions leave room for a greater chance of fraud. While methods with less volume reduce that chance while limiting your audience.

Evaluating aspects beyond affected payment methods can be useful in identifying potential fraud but are very difficult to break down yourself. Between tracking how a fraudulent charge unfolds, to breaking down how a company or consumer recovers; the resources, and optics needed to fully analyze these situations are not feasible for most businesses. That’s why primary data programs like Fraud Experience Payment Insights possess the facilities, and means to evaluate these different factors properly and efficiently. Their 2022 Payment Fraud Report examines these aspects in detail by dissecting financial scenarios, like the varying risk for different payment methods, or the dollar value of fraud incidents. While also analyzing client service-based scenarios, like identity theft-related fraud, consumer experiences resolving fraud, as well as customer attitudes regarding fraud and their banks.

Continually learning and examining past experiences through qualified resources like Fraud Experience Payment Insights is the perfect way for your business and your consumers to avoid fraud in the future. Amy Dunckelmann, their VP of Research, puts it best.

“Payment and identity-related fraud prevention can be achieved by building an alliance with consumers and learning from past fraud experiences so that financial institutions and merchants can continue to educate both themselves and their consumers on what patterns to look out for so that they can avoid becoming victims of fraud”. (1)

If you’re disproportionately affected by fraudulent transactions, RevitPay is a payment processing solutions company that can effectively protect your business. Contact us today so we can protect you and your clients from chargebacks, known problematic customers, and bots.

Documents cited

1. 2022 Fraud Experience PaymentsInsights: Payment Fraud – The Consumers’ Perspective – Meta Advisory Group Website Product Page https://www.mercatoradvisorygroup.com/product/2022-fraud-experience-paymentsinsights-payment-fraud-the-consumers-perspective/

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