Information isn’t just power; it’s reassurance—and because data enables more accurate, strategic business decisions, it’s the most important tool a company has to stay stable and proactive during times of disruption.
But fraud is quickly changing shape in the wake of COVID-19, presenting unexpected shifts, new criminal methods, and unique challenges across all e-commerce markets. Using proprietary data from Sift’s global network, we’re tracking weekly fraud trends in several key verticals to help you stay informed and prepared for the unpredictable.
Market snapshot: Following fraud across e-commerce
Sift’s core mission is to make the internet a safer place. With the onset of the novel coronavirus, we’re even more focused on delivering the intel and solutions required for businesses to preserve growth, protect customers, and deftly manage unknowns. Using our unrivaled network of data and real-time machine learning to analyze over 35 billion events per month—e.g., signals that our customers submit, like transactions, login attempts, and account creations—we unearth new fraud indicators and trends as they develop.
Our new E-Commerce Fraud Tracker uses a 7-day moving average of our data to highlight the major, week-over-week fluctuations now taking place across the digital marketplace as a result of COVID-19. We’ve watched event volumes change significantly over the course of just a few weeks, and seen unexpected strategies emerging in payment fraud—making it even more critical that we continue to surface real-time, valuable insights for merchants and consumers alike.
Here’s some of what we’ve learned so far:
Volume spikes are a magnet for misconduct. Many online businesses, such as those in the food and beverage or education space, have seen major leaps in activity and order volume as a result of the pandemic. This explosion of customers is great for business—and incredibly attractive to fraudsters. Across all of e-commerce, the rate of attempted payment fraud (in other words, the percentage of fraudulent payments out of total transactions) has risen about 50% since the start of the year, which could be due to fraudsters’ ability to hide more effectively beneath ballooning event volumes.
Demand for digital is sky-high. Widespread shelter-in-place orders have led nearly everyone to live more virtual lives, trading date nights for delivery and adopting every form of streaming, downloadable, or mobile entertainment they can get their hands on. In digital e-commerce, event volume jumped 23% in March, and has continued to rise steadily over the past month. Even with a swollen customer base, fraud rates appear to have gone down—however, it’s likely that instances of fraud have remained steady or even spiked, but are being calculated against much higher event volumes, causing the fraud rate to trend downward.
Fraudsters are industry-agnostic. One of the more surprising outcomes we’ve surfaced is the quickly-widening fraud blitz in online education. This vertical got hit with a tsunami of students and educators pivoting quickly to virtual classrooms and content—and fraudsters everywhere saw an opportunity to cash in on the melee. Fraud is up 17% in online learning, and this vertical currently shows the highest fraud rate across the entire Sift network. From account takeover to credential stuffing, millions of new accounts being created and dollars being spent to bring school to screens around the world makes this market a playground for digital outlaws.
Stay aware, stay ahead
The environment around us is, in many ways, changing by the hour. And while it’s tempting—and entirely business-as-usual—to expect things like fraud trends to unfold in a straight line, the reality is that the predictability we rely on has become more fluid than solid. Our E-Commerce Fraud Tracker is designed to help business leaders manage expectations for their companies and communities, make more strategic decisions with information that’s recent and relevant, and bring clarity to the confusion being felt throughout the global economy.
Click here to explore the latest data and subscribe to weekly updates.