BERLIN, July 20, 2022 – 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.
Fraud attack findings
109% Increase in Identity fraud
70% rise in Gift Card fraud
52% Increase in Account Takeover (ATO ) attacks
Average Order Value by Vertical: BNPL €146, Travel €580, Physical Goods: €147, Digital Goods €20
Preferred shopping times based on the number of orders
Top sanctioned countries: Russia, Iran, Syria and North Korea
Total AML fines in 2021 amounted to € 2.5B, with over 80 institutions being fined.
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
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)
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.
Christian Mangold, Fraugster CEO says “We are excited to publish the first edition of our Payment Intelligence Report 2022. By researching our own data we gleaned information about Compliance, Fraud Risk and Revenue Uplift that will enable us to make adjustments where required to ensure that our merchants can minimize fraud and maximize revenues.”
To view the complete Payment Intelligence Report 2022, please click here.
Fraugster is a Berlin based payments intelligence company that helps the e-commerce ecosystem to minimize fraud and maximize revenue by making smarter real-time business decisions. We help our customers solve multiple use cases by giving them access to various, interoperable products via one integration.
Fraugster has developed one of the most accurate AI fraud prevention solutions on the market and is backed by some of Europe’s most reputable deeptech investors from Earlybird to Speedinvest, CommerzVentures and Munich Re Ventures. Further information can be found at https://www.fraugster.com/