A new report by Juniper Research has revealed that eCommerce fraud is predicted to surge from $44.3 billion in 2024 to $107 billion by 2029.
The sharp rise which represents a staggering 141% increase over five years, is largely attributed to the rise in AI-driven fraud attacks, which are becoming more sophisticated and difficult to detect.
The report underscores how AI technology has revolutionized the way fraudsters operate within the e-commerce ecosystem. Also, it exposes how Al-driven techniques, such as deepfakes, pose serious risks to online merchants by bypassing traditional verification systems.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
In addition to deepfake technology, fraudsters are also reportedly utilizing Al to generate synthetic identities and fraudulent transactions at scale. This allows them to produce more convincing fake identities and automate attacks, leading to a surge in the volume and quality of fraudulent activities. These Al-enabled attacks can overwhelm traditional, rules-based fraud prevention systems, leaving merchants and financial institutions vulnerable.
Adding to the complexity is the growing issue of “friendly fraud,” where legitimate customers themselves commit fraudulent acts, such as falsely claiming a refund or disputing a charge. This type of fraud is on the rise and poses a unique challenge, as it is often harder to detect and mitigate compared to attacks by external fraudsters.
The report, titled “Global Merchant Fraud Prevention Market 2024-2029”, underscores the importance of fraud prevention systems equipped with Al capabilities. According to report author Thomas Wilson, he noted that merchants- especially those in developed markets with larger eCommerce operations must invest in fraud detection systems that can rapidly identify and counter evolving threats.
He wrote,
“eCommerce merchants must seek to integrate fraud prevention systems that offer Al capabilities to quickly identify emerging tactics. This will prove especially important in developed markets, where larger merchants are at higher risk of being targeted for fraud, such as testing stolen credit cards.”
To combat the rising threat of Al-driven fraud, the report notes that eCommerce merchants are increasingly turning to the same Al technologies used by fraudsters to mitigate fraudulent activities. By incorporating Al into their fraud detection systems, merchants can analyze transaction patterns in real-time, enabling them to quickly identify suspicious activity. This proactive approach is crucial in the fight against the increasingly complex and automated nature of Commerce fraud.
One of the most promising ways for merchants to secure transactions is by integrating biometric identification methods into their checkout processes. This could involve using techniques such as liveness detection, which can distinguish between al human actions and Al-generated deepfakes.
Liveness detection and other biometric systems can offer stronger protection by verifying that the user is a genuine, present individual rather than an Al-created identity or pre-recorded video. By implementing these advanced security measures, merchants can protect themselves and their customers from increasingly sophisticated fraud attempts.
However, as Al continues to evolve, the report underscores the need for continuous innovation in fraud prevention strategies to keep pace with the growing capabilities of cybercriminals.