The Financial Impact of Fraud
- Date:October 25, 2016
- Author(s):
- Al Pascual
- Report Details: 35 pages, 19 graphics
- Research Topic(s):
- Fraud Management
- Fraud & Security
- PAID CONTENT
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Overview
This report analyzes the findings of a new independent study that examines how the cost of fraud has significantly increased post-EMV when compared to 2015, and the associated challenges impacting a merchant’s ability to successfully grow their business.
Key findings:
- Fraud costs merchants more than 7.5% of their annual revenue.
- False positives account for 2.8% of revenue lost.
- Fraud and chargeback management consume between 14% and 23% of operational budget.
- Digital goods merchants suffered the worst losses, at 8.6% of revenue on average, but hybrid goods merchants faced similar costs at 8.1% of revenue.
Methodology
Vesta Corporation retained Javelin to conduct an independent online study in June 2016 of 500 e-commerce merchants earning $1 million or more annually, including 156 merchants selling only digital goods, 155 merchants selling only physical goods, and 189 hybrid merchants, selling both types of goods.
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