Juniper Research reports payment frauds to exceed $206 billion by 2025

By Joy Dumasia

A new study from Juniper Research has found that merchant losses to online payment fraud will exceed $206 billion cumulatively for the period between 2021 and 2025. This figure demonstrates why merchants must combat fraud by using machine learning-based fraud prevention platforms as an immediate priority.

The research identified that the pandemic has led to a surge in synthetic identity and account takeover fraud, threatening the security of entire accounts alongside associated payment data. Juniper research recommends payment fraud detection vendors focus on partnering on data agreements now to maximise the data available to machine learning algorithms, boosting chances of identifying fraudulent transactions.

The Research, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2021-2025 Market Research found that remote physical goods purchases are the leading cause of online payment fraud, accounting for over 47% of fraud losses in 2021. 

Juniper research also found that spending on fraud detection and prevention platform services will exceed $11.8 billion globally in 2025, from $9.3 billion in 2021. Accordingly, the research recommends that fraud detection and prevention vendors focus on building platforms that can cover all the emerging channels of payment traffic, including new areas such as open banking payments, supported by data partnerships, and backed by large-scale machine learning best outcomes. 

Research co-author Nick Maynard stated: “Given the large amounts of online payment transactions globally, it is essential that this transactional data is leveraged to continually detect fraudulent transactions. Payment providers who can use this data to identify new fraud sources and tactics will be those who prove to be the most resilient to this significant market loss.”

Recently, IBS Intelligence reported that Juniper Research has found that the global value of virtual card transactions will reach $6.8 trillion in 2026, from $1.9 trillion in 2021. Virtual cards, secure digital cards with randomly generated details, will show strong growth as they are increasingly used for B2B payments.