This report, sponsored by NuData Security, a Mastercard company, explores the relationship between card fraud and false positive declines in e-commerce transactions, along with the effects of those declines on consumers. In the fight against credit card and debit card fraud, merchants and issuers unwittingly create unintended casualties when they decline a legitimate cardholder’s transaction because of suspected fraud. No one wins when a “false positive” decline happens, and yet such denials occur with alarming frequency. In 2017, fraud-related false positives affected roughly 1 in 15 (6.7%) consumers, and the challenge of addressing this threat will only grow as fraudsters shift their tactics to target online and mobile retailers. Effectively combatting false-positive declines requires a collaborative approach between merchants and card issuers to share data enabling both parties to distinguish between fraudulent and legitimate cardholders.

This report was adapted from Addressing the Threat of False Positive Declines, published by Javelin Strategy & Research in October 2018. Javelin Strategy & Research maintains complete independence in its data collection, findings, and analysis.