09/23/2021

Vesta Report: Card-Not-Present Fraud is Becoming Increasingly Sophisticated, Creating New Threats for Merchants Across the Globe

Blue Mountain Eagle

PORTLAND, Ore., Sept. 22, 2021 /PRNewswire/ -- Vesta, an end-to-end transaction guarantee platform for online purchases, today released its first Global Card-Not-Present (CNP) Fraud Report, which includes an analysis of millions of digital transactions from the first quarter of 2020 through the first quarter of 2021 to track how CNP fraud evolved during that time frame. The overall percentage of global transactions its system identified as being potentially fraudulent ranged from 10 to 13%, with the average value of each fraudulent transaction ranging from $126 to $155. Fraud attempts, however, are not evenly distributed: fraudulent attempts at individual merchants ranged from 0.8% to over 30% depending on business vertical and geography.

A CNP transaction occurs when a sale is made without the customer physically presenting their credit card to the merchant, and when a CNP transaction turns out to be fraudulent, the liability lies with the merchant. When a merchant approves a fraudulent CNP transaction it leads to a chargeback, and chargebacks come with fees - sometimes as high as $25 per incident. In the first quarter of 2020 Vesta found that 13% of overall transactions were likely fraudulent, and therefore it blocked those transactions to protect its customers. It is important to remember that 13% is an aggregate number, inclusive of both high and low-risk merchants. For low-risk merchants, Vesta approved as many as 99% of all transactions, but for high-risk merchants that approval rate varied greatly depending on fraudulent activity. For high-risk merchants that don't have a solution like Vesta's in place, approving so many fraudulent transactions can have a dire impact on both revenue and overall brand reputation.

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