A new study from Juniper Research predicts that the value of e-commerce fraud will rise by 141% from US$44bn in 2024 to US$107bn in 2029, driven by the rise in the use of AI.
According to the Global Merchant Fraud Prevention Market: 2024-2029 report, AI is fueling the sophistication of attacks across the e-commerce ecosystem, with the use of deepfakes created using AI to defeat verification systems being a key threat. This threat, combined with rising levels of ‘friendly fraud’, where fraud is committed by the customer themselves such as refund fraud, is increasingly threatening merchant profitability.
By creating credible messages and many synthetic identities, AI is facilitating higher quality attacks with an unprecedented frequency, the study found. These technologies are also highly scalable, enabling fraudsters to automate their attacks and overwhelm rules-based prevention systems.
Report author Thomas Wilson explained, “E-commerce merchants must seek to integrate fraud prevention systems that offer AI 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.”
The report suggested that merchants are employing these same technologies to recognize emerging fraud patterns and react in real time, and that they should incorporate biometric identification into checkout processes to further secure transactions. By using methods such as liveness detection, merchants will be able to protect their business and customers from increasingly sophisticated AI deepfake fraud attempts, according to Juniper Research.