Fraugster, a payment intelligence company which is the first player to offer compliance, chargeback protection, risk management solutions and credit scoring via one AI platform and one integration, today announced the publication of its first Payment Intelligence Report 2022.
This provides insight into key Compliance, Fraud Risk and Revenue Uplift trends in the market. Information from 60B data points and 80M individual transactions in 2021 were analyzed by the Fraugster team.
Findings highlight the latest fraud tactics being deployed against Payment Service Providers (PSPs), Buy Now Pay Later (BNPL) suppliers and Merchants in Travel, Physical and Digital Goods, challenges, and opportunities for BNPL players, chargeback trends, popular fraud types, PSD2 impacts, and future trends for 2022 and beyond.
Research highlights:
Fraud attack findings
109% Increase in Identity fraud
70% rise in Gift Card fraud
52% Increase in Account Takeover (ATO) attacks
Checkout/Basket facts
Average Order Value by Vertical: BNPL €146, Travel €580, Physical Goods: €147, Digital Goods €20
Preferred shopping times based on the number of orders
Sanction information
Top sanctioned countries: Russia, Iran, Syria, and North Korea
Total AML fines in 2021 amounted to €2.5B, with over 80 institutions being fined
Chargeback data
46% of the total chargebacks were filed within a span of 60 days
15% (pre-pandemic) to over 50% (pandemic peak) increase in angry chargebacks
Average chargeback by value by vertical: Travel € 710, Gaming: €25, Fashion: €220
Total cost of chargeback to the merchant is 2.9x the value of chargebacks
BNPL snapshot
Bad debts as a percentage of total outstanding debt for Credit Cards stood only at 5.30% compared to an estimated 9.55% for Buy Now Pay Later providers
62% growth of new user group adopting BNPL (18-24 age bracket)
3DS data
20-50% of a merchant’s transaction flow is redirected to frictionless 3DS
Decrease in Issuer declines post 3DS, compensates for customer drop-offs, therefore, balancing overall acceptance rate.
Vertical quick dives
Airlines lost over €6.5B to fraud in 2021, which is equivalent to the global average cost of 24,000 flight tickets with fraud losses amounting to 1.5% of total global airline revenue.
Total direct fraud losses for digital goods (consisting of gaming, gambling, and gift cards) amounted to € 3.58B in 2021, with over €13.72B worth of genuine transactions lost due to false positives.
Fashion had the highest percentage contribution to revenue i.e., 28%, followed by home and living (22%), electronics (19%), food and personal care (18%) and furniture (13%). Nearly €69.65 B from the total revenue for physical goods was lost to fraud in 2021.
To view the complete Payment Intelligence Report 2022, please click here.
Also, follow this link to find out what mistakes are companies consistently making that led to 80B euros lost in a single year. Christian Mangold, CEO of Fraugster Discusses the Payment Intelligence Report 2022
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
