Global Fraud Report 2023 en

2023 Global
2023 Global
Ecommerce
Ecommerce
Payments And
Payments
Fraud Report
And Fraud
Report
Global Fraud and Payments Survey Report 2023 1

Limitation of liability
The information, recommendations or “best practices” contained herein are provided “AS IS”
and intended for informational purposes only and should not be relied upon for business,
operational, marketing, financial, legal, technical, tax or other advice. When implementing
any new strategy or practice, you should consult with your legal counsel to determine what
laws and regulations may apply to your specific circumstances. The actual costs, savings
and benefits of any recommendations, programs or “best practices” may vary based upon
your specific business needs and program requirements.
By their nature, recommendations are not guarantees of future performance or results and
are subject to risks, uncertainties and assumptions that are difficult to predict or quantify.
Assumptions were made by us in light of our experience and our perceptions of historical
trends, current conditions and expected future developments and other factors that we
believe are appropriate under the circumstance. Recommendations are subject to risks and
uncertainties, which may cause actual and future results and trends to differ materially from
the assumptions or recommendations.
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Report contents
04 Overview
05 Survey Firmographics
06 Executive Summary
09 Section 1: Payment Acceptance
13 Section 2: Payment Management
16 Section 3: Business Impact of Fraud
21 Section 4: Fraud Attacks & Challenges
27 Section 5: Fraud Prevention
31 Conclusion
32 About The Authors
33 Appendix 1 – Conversion and Acceptance Rates

By Payment Method
34 Appendix 2 - Questions Asked In The Survey

Overview
The Merchant Risk Council (MRC), Cybersource, and Verifi are pleased to present the results
of the 2023 Global Ecommerce Payments & Fraud Survey, an educational report designed to
convey transparent and unbiased research. This report is based on a global survey of more
than 1,000 MRC and non-MRC merchants who were asked about their ecommerce payments
and fraud management practices. The survey sample includes a diverse mix of small
businesses (SMBs), mid-market and enterprise merchants, representing organizations based
throughout the North American, European, Asia-Pacific (APAC) and Latin American (LATAM)
regions. This research was conducted in November and December of 2022.
These survey results delve into today’s rapidly changing payments landscape to illuminate
the range of different payment acceptance, management and partnership practices
merchants are deploying, as well as the reasons why they are adopting these payment
strategies and tactics in the current commercial environment. In addition, this research
provides the MRC merchant community with the latest industry fraud data and fraud
management methods used by their peers, along with a robust set of performance
benchmarks that members can use to help optimize their fraud management and
prevention practices.
The MRC extends its thanks to all participating merchants for taking the time to complete the
online survey, to Cybersource and Verifi for managing the research, and to B2B International for
directing the program and analyzing the data.

Survey firmographics
The survey was fielded in November and December of 2022. A total of 1,072 merchants
involved in ecommerce fraud and payment management (including 57 MRC member
companies) participated in the research. The sample includes merchants based in four major
geographic regions, with broad representation across size / revenue tiers, sales channels and
categories. The breakdown of the merchant sample across key firmographics is shown in the
figures below.
Region Company size

(annual eCommerce revenue)
25%
36%
42%
41%
17%
17% 21%
North America Europe SMB ($50k to <$5mn) Mid-Market ($5mn
APAC LATAM Enterprise ($50mn+) to <$50mn)
Figure 1 Figure 2
Industry vertical
52%
32%
8% 8%
Physical Goods Travel & Tourism

& Retail
Digital Goods Other Products & Services
& Entertainment
Figure 3
The global sample distribution by region and size segment was kept consistent, year to year.
Some results may be driven by differences in the merchant populations surveyed in each
region. Among the MRC members in the survey sample, two-thirds (67%) are based in North
America, with the remainder largely based in Europe (29%). 9 out of 10 MRC merchants in the
survey are large enterprises, generating over $50mn in annual ecommerce revenue.

Executive summary
The key findings from the 2023 Payments & Fraud survey are organized into five focus
areas, or sections, in this report. Each section addresses a central question integral to
understanding the state of ecommerce payments and fraud from the merchant perspective.
The first two sections focus on insights pertaining to ecommerce payments, while the last
three delve into topics related to ecommerce fraud.
These five focus areas, along with the key, high-level findings in each, are summarized below:
1. Payment Acceptance – How are merchants

being paid?
• Bank transfers, digital wallets and cards continue to be the most widely accepted
payment methods among ecommerce merchants. Roughly 90% of merchants take
some measures to encourage customers to pay via certain, preferred methods,
primarily to minimize fraud risks and maximize how quickly funds become available.
• Merchants are increasingly implementing buy-now-pay-later (or “BNPL”) payment

methods, with over one-third (36%) now offering customers this option. Acceptance
of card payments also increased globally over the past year. BNPL payments, crypto
payments and local digital payments (such as PIX and Alipay) stand out as the
fastest-growing methods, with most who accept these having implemented them
this year.
• Improving the customer experience is the top reason merchants add new payment
methods, but reaching new customer segments or markets is an important driver,
too. Similar motivations are driving merchants’ increased usage of third-party
marketplaces, with 8 in 10 transacting via the likes of Amazon, eBay and similar
marketplace partners.
• Merchants continue to leverage multiple payment processors and acquiring banks to

support omnichannel payments, although small merchants use significantly fewer of
these partners than mid-market and enterprise businesses. Maximizing operational
flexibility, geographic coverage, and payment authorizations top the list of merchant
motivations for utilizing multiple acquirers.
2. Payment Management – How are merchants

optimizing experiences & platforms?
• To keep up with fast-changing shopping habits and payment preferences, merchants

continue to adopt and experiment with multiple new retail approaches and customer
experiences. Over the past year, BNPL and subscription / recurring purchases saw the
largest increases in usage, with over one-third of global merchants now offering these
options, compared to roughly one-quarter in 2021.
Global Fraud and Payments Survey Report 2023 6 6

• When it comes to new customer payment experiences, merchant usage of chatbots
and customer service AI programs, as well as connected devices, increased
substantially this year. In keeping with trends from previous years, enterprises and
APAC-based merchants over-index significantly when it comes to embracing these
new approaches and experiences, while adoption skews much lower among SMBs
and MRC members.
• Merchants now employ an average of two to three different approaches or techniques

designed to optimize payment authorization. In particular, usage of machine learning
to fine-tune fraud management, as well as intelligent payment routing, have seen
increased adoption over the past year, with around 4 in 10 now utilizing each of
these approaches.
• As merchants utilize a larger array of payment methods, commerce partners and new
retail approaches to serve customers, they are also tracking a wider range of payment
KPIs. The share who track payment success rate, revenue and cost of payments all
increased significantly over the past year, as did the percentage who keep a close eye
on refund rates. On average, merchants now cite over four different payment KPIs as
“extremely important” for their organization (up significantly versus last year).
3. Business Impacts Of Fraud – What are the

effects of fraud on merchant businesses?
• Following a turbulent year in which fraud KPIs increased across the board, this year
saw encouraging improvement in several key fraud management metrics, such as the
share of ecommerce revenue lost to fraud, domestic order rejection and fraud rates,
and the share of ecommerce orders that led to fraud-related chargebacks. Decreased
fraud metrics were particularly evident in North America, where spending on fraud
management rose markedly last year. This year, anti-fraud spending rose significantly
in APAC and Latin America, as well as among small businesses, suggesting that these
segments may hope to see improvement in their fraud metrics in the coming year.
• On the subject of manual order review, merchants’ sentiments and future strategies
have remained consistent over time, with around 6 in 10 seeking to reduce or eliminate
this aspect of fraud management. Size of business is an important factor here, as
SMBs are apt to try to reduce or eliminate manual review, while enterprises are likely to
retain it.
This year, APAC and LATAM-based merchants also stood out

as the only segments reporting significant increases in the percentage
of manually screened orders that they subsequently decline.
• Roughly 85% of merchants have started implementing Strong Customer

Authentication (SCA) to comply with the EU’s PSD2 regulations, but roughly half (49%)
have yet to complete this process. Merchants in Europe & APAC, as well as large
enterprises, are taking the lead in this area. As merchants have adjusted to PSD2/
SCA in recent years, there has been a sharp increase in the share who say it has added
complexity to how they manage compliance (versus how they manage fraud and
payments).
New questions added to this year’s survey show recurring transaction,

secure corporate payment (SCP) and transaction risk analysis (TRA) are
the top three SCA exemptions likely to be used most widely by merchants,
moving forward.

4. Fraud Attacks & Challenges – Where are
merchants most vulnerable?
• Phishing / pharming / whaling attacks are still most prevalent. The incidence of
this attack, as well as re-shipping attacks, increased markedly in the past year. MRC
Members continue to cite a much larger and broader range of fraud attacks than
non-members (reporting 6, on average, versus just 3 for non-members).
First-party misuse, card testing & account takeover are particularly problematic
for MRC merchants.
• Over one-third of merchants experience first-party misuse or “friendly fraud,” with

enterprises in particular seeing a significant spike in this activity. Roughly 9 in 10
submit compelling evidence to resolve friendly fraud disputes, and 7 in 10 are aware
of card brands’ recent updates to these policies. Those that are aware are generally
quite optimistic these updates will help combat this thorny issue.
• Merchants cite increasing challenges in managing ecommerce fraud over the past few
years. Effectively using data and analytics to manage fraud has become a particularly
pressing challenge and also a key focus area for improvement this year. Merchants
in APAC and Enterprises face a disproportionate number of fraud management
challenges, in contrast to those in North America and SMBs. MRC members struggle
more than non-members when it comes to fraud tool deficiencies &
resource constraints.
5. Fraud Prevention – How are merchants

addressing the issue of ecommerce fraud?
• Continuing a trend from last year’s survey, merchants are more likely to prioritize
preventing fraud and chargebacks, versus improving CX or minimizing costs. But
merchants in Latin America are more evenly split on this question with equal shares
prioritizing fraud prevention versus CX improvement.
• Merchants are utilizing an increasing array of fraud detection tools – five, on average
– with over half using credit card and identity verification services. Enterprises use a
significantly larger arsenal of fraud detection tools, while SMBs use fewer tools than
average. MRC members use twice as many fraud detection tools as non-members, on
average, which is likely linked to MRC merchants’ much higher propensity to outsource
fraud tools. But MRC members are far less likely than non-members to use two-factor
phone authentication and credit history checks.
• The most widely used tools are generally rated the most effective, but more merchants
should consider using biometric indicators, individualized fraud scoring models, &
multi-merchant purchase velocity models, given these tools’ low usage and
high effectiveness.
Altogether, the insights and findings from this year’s study indicate that merchants are striking an increasingly successful balance
between leveraging technological tools and tactics and applying human knowledge and expertise to optimize payment & fraud
management. This strategic challenge is evident in many of the trends and topics discussed throughout the report, making it one
of the central themes emerging from our research this year.

1. Payment
Acceptance
and Partners
In the first two sections of this report, the focus is on ecommerce payments. Specifically, these sections examine how merchants are
being paid by consumers and how they are managing and optimizing payment processes and operations.
This section delves into the question of how merchants are being paid – i.e., which payment methods they accept, how many processing
and finance partners they use to support payment acceptance, and how their acceptance strategies and partnerships vary by region,
size, and MRC membership status.
Direct Debit, Digital Payments And Cards Still Most Popular Payment Methods Accepted, With Buy
Now Pay Later (BNPL) On The Rise
Globally, ecommerce merchants currently accept payments via four primary methods: digital wallets, direct debit transfers, traditional
cards and mCommerce mobile apps (such as PayPal mobile or Amazon one-click). Cash is also accepted by nearly half of merchants,
while gift cards and vouchers, third-party payments, and buy-now-pay-later (BNPL) payments are each accepted by around 3 in 10.
Over the past 12 months, merchants have been most likely to add digital wallets, BNPL and mCommerce payments to their acceptance
portfolio (see Figure 4). Localized digital payment methods, like PIX and Alipay, as well as cryptocurrency payments, also seem to be on
the rise, as most merchants who accept these began doing so over the past 12 months.
Figure 4: Payment Methods Currently Accepted & Added In Past 12 Months (2023)
Payment Methods Currently Accepted & Added In The Past 12 Months
(+9%) Avg. Number Currently Accepted = 4.6

67%
66% 66%
Avg. Number Added In P12M = 2.2

(-7%)
50%
45%
(+6%)
37% 36%
33%
30%
25% 24%
23%
19% 19%
16% 15% 15% 16% 17%
14% 14%
9% 8% 8%
Bank Digital Cards mCommerce Cash Buy Now Gift Cards / Cash on Other local Crypto- Other Network
transfers / wallets / mobile payments Pay Later vouchers delivery digital currency alternative tokens
direct debit eWallets (e.g. (e.g. Amazon payment payments
Apple Pay) one-click) (e.g. PIX, Alipay) (e.g SEPA)
Currently Accepted Added in P12M = Sig. Higher vs. 2022 = Sig. Lower vs. 2022

In addition to the year-over-year trends illustrated in Figure 4, our 2023 data also reveal notable differences in the types and numbers
of payment methods accepted by merchants in different regions and size segments. Although cards, bank transfers / direct debit
and digital wallet payments are the top three most widely accepted methods in all four regions, there are significant differences in
acceptance of other forms of payment across different geographic markets. For instance, North American merchants are nearly twice as
likely as those in Europe to accept cryptocurrency payments (23% vs. 13%). Latin American merchants skew higher than those elsewhere
on acceptance of both card payments (at 79%) and local digital payments, like PIX (accepted by 46%). And merchants in APAC over-
index on acceptance of digital wallet payments (76%), mCommerce mobile payments (59%), and BNPL (54%).
When it comes to the number or variety of different payment methods currently accepted, merchants in APAC and enterprise merchants
tend to accept more payment methods than average, while merchants in North America and SMBs accept fewer than average (see
Figure 5). Looking at the numbers of new acceptance methods added over the past year, it’s clear that APAC merchants are embracing
a broader approach than those in other regions – especially Europe – with the former group adding almost twice as many new payment
methods as the latter, on average (see Figure 5).
Figure 5: Average Numbers Of Payment Methods Currently Accepted And Added In Past 12 Months (2023)
By Region (2023) By Ecommerce Revenue (2023) By MRC Status (2023)

Average Numbers of Payment Methods
Accepted & Added In Past 12 Months Overall North Europe APAC LAT AM SMB Mid- Enterprise Non- MRC
America Market Member Member
Base 1,072 440 269 180 177 391 226 455 1,015 57
Average No. Of Payment Methods Accepted 4.6 4.3 4.4 5.3 4.7 4.2 4.5 5.0 4.6 5.1
Average No. Added In Past 12 Months 2.2 2.1 1.7 3.2 2.0 1.7 2.2 2.5 2.2 0.9
= Sig. Higher = Sig. Lower
Also, MRC merchants take a notably different approach to payment acceptance than non-members. MRC merchants are significantly
more likely to accept cards, digital wallets, gift cards or vouchers and other alternative payments, such as SEPA and Giropay (see Figure
6). MRC members also lead adoption of BNPL, with 47% accepting this method, compared to 35% among non-members. But non-
members seem to be catching on quickly with BNPL, as this year’s survey shows a significant rise in the share who accept it, compared
to last year.
Figure 6: Differences In Payment Acceptance Among MRC Members vs. Non-Members
Share of Merchants Currently By MRC Status (2023)

Accepting Each Payment Method
Overall Non-Member MRC Member
Base 1,072 1,015 57
Bank transfers / direct debit 67% 68% 49%

Digital wallets / eWallets 66% 66% 82%
Cards 66% 64% 96%
mCommerce mobile payments 50% 51% 32%
Cash 45% 46% 30%
Buy Now Pay Later 36% 35% 47%
Gift Cards / vouchers 33% 32% 56%
Cash on delivery 30% 31% 11%
Other local digital payment method 24% 24% 37%
Cryptocurrency 19% 19% 11%
Other alternative payments (SEPA, Giropay, etc.) 13% 12% 49%
Network Tokens 8% 8% 7%

Another aspect of payment acceptance in which MRC merchants diverge from non-members is when it comes to encouraging payments
via certain, preferred methods. While 9 out of 10 merchants globally encourage payments via preferred methods, the same is true of only
around half of MRC members (see Figure 7). The vast majority of merchants who do encourage payments via preferred methods mainly
do so to lower fraud risk, expedite availability of funds, and lower payment processing costs.
Typical approaches used by merchants to encourage such payments include promoting and incentivizing the use of preferred methods
(for instance, through discounts or reward programs), offering preferred methods prior to the main payment selection page, and pre-
selecting preferred methods as default payment options for customers. (see Figure 7).
Figure 7: Approaches And Reasons For Encouraging Ecommerce Payments Via Preferred Methods
Approaches Used To Encourage Payments Via Preferred Methods Main Reason For Encouraging Use Of Preferred Methods
2023 (n=1,072) 2023 (n=952)
Promote preferred payment methods 46% Lower payment fraud risk 28% Mid-Market (35%)
Offer preferred payment methods prior to Faster availability of funds

payment selection page
41% 23%
Provide incentives for using preferred 41% Lower payment processing costs 21%
payment methods
Pre-select preferred payment method 39% Higher conversion rate 17% Enterprises (22%)
Include surcharge / fee for non-preferred Preferred / exclusive partner

25% 11%
methods arrangement
None of the above (we do not encourage MRC Members

customers to use any specific methods) 11% (47%)
= Sig. Higher vs. other segments = Sig. Lower vs. other segments
Third-Party Marketplaces Remain Key Partners, Especially For Large & Midsize Merchants
Over three-quarters (77%) of merchants sell through third-party marketplaces, like Amazon and eBay and Alibaba (see Figure 8). Midsize
and enterprise merchants over-index on using marketplaces to support online business, in contrast to SMBs. Non-MRC members
are also far more likely to sell through marketplaces than MRC members. Gaining access to the large numbers of loyal customers that
use these marketplaces is the primary reason merchants utilize them, although other motivations are also at play, like offering good
customer experiences and being able to compete with other merchants on a level (and global) playing field (see Figure 8).
Figure 8: Usage Of Top Third-Party Marketplaces And Reasons For Using Them
Top 5 Marketplaces used (% merchants using each marketplace to sell to customers) Enterprises (2.9)
Avg Number Marketplace Used = 2.5
SMB (2.0)
62% 2023 (n=1,072) MRC Member (1.4)
38%
27% 27% 19% 23%
Do Not Sell On Any

Marketplaces
Reasons for Using Third-Party Marketplaces

Enterprises (45%)
60% SMB (29%)

52% 43% 41% 38% 33%
To gain access to larger To offer a good To compete on a level To engage in eCommerce To conduct commerce To benefit from
number of loyal customers customer experience playing field with other without needing to to is fully location low startup costs
merchants build a website independent

Payment Acceptance Supported By Multiple Processor and Acquirer Partners
While online marketplaces may occupy the gray area between cooperation and competition with ecommerce merchants, there are
other third-party partners – specifically, payment processors and acquiring banks – that are far more essential to supporting payment
acceptance offerings.
On average, merchants rely on roughly four payment processor or gateway connections and three acquiring banks to support
omnichannel payments, although these figures skew a bit higher for APAC and LATAM-based merchants and lower for those in North
America. Enterprise merchants also tend to use more of these partners than SMBs (see Figure 9).
Maximizing flexibility, geographic coverage, and payment authorizations represent the main reasons why merchants utilize multiple
acquirers. APAC-based merchants and enterprises tend to cite additional reasons, as well – for instance, eliminating interchange fees
in certain countries. This partly explains why these segments tend to use more of these partners than merchants based in other regions
and size segments.
Figure 9: Usage Of Payment Processors & Acquiring Banks To Support Payment Acceptance
By Region (2023) By Ecommerce Revenue (2023) By MRC Status (2023)

Number Of Payment Partners Used
(Trimmed averages shown for both) Overall Overall North Europe APAC LAT AM SMB Mid- Enterprise Non- MRC
2022 2023 America Market Member Member
Number Of Payment Gateway / Processor 4.1 3.9 3.5

By Region (2023)
3.8 4.5 4.7
By Ecommerce Revenue (2023)
3.2 4.2 4.3
By MRC Status (2023)
4.0 3.3
Number Of Payment Partners Used
Connections Currently
(Trimmed averages shownSupported
for both) Overall Overall North Europe APAC LAT AM SMB Mid- Enterprise Non- MRC
2022 2023 America Market Member Member
Number Of Merchant Acquiring Banks 3.2 3.4 2.9 3.2 4.1 3.9 2.7 3.4 3.9 3.4 2.9
Currently
Number OfUsed
Payment Gateway / Processor 4.1 3.9 3.5 3.8 4.5 4.7 3.2 4.2 4.3 4.0 3.3
Connections Currently Supported
Reasons
Number For Using Multiple
Of Merchant Acquiring
Acquiring BanksBanks (among n=806 merchants using 2 or more acquiring banks)
3.2 3.4 2.9 3.2 4.1 3.9 2.7 3.4 3.9 3.4 2.9
Currently58%
Used
44% 42% 39% 39% 33% 32%
Reasons For Using Multiple Acquiring Banks (among n=806 merchants using 2 or more acquiring banks)
58% APAC (55%) APAC (54%) APAC (50%)
44% Enterprise (50%) 42% Enterprise (50%)
39% 39% Enterprise (41%)
For overall To improve or To improve or To gain access to To improve or

33%
To eliminate 32%
Because they are integral
flexibility maximize maximize distinctive technologies maximize uptime interchange fees in components of existing /
geographic APAC (55%) authorizations APAC (54%) or capabilities certain countriesAPAC (50%) broader relationships
coverage Enterprise (50%) Enterprise (50%) Enterprise (41%)
For overall To improve or To improve or To gain access to =To improve

Sig. Higheror To eliminate
vs. other segments = Sig.Because they
Lower vs. aresegments
other integral
flexibility maximize maximize distinctive technologies maximize uptime interchange fees in components of existing /
geographic authorizations or capabilities certain countries broader relationships
coverage

2. Payment
Management
In this section, we examine what merchants are doing to improve and innovate customer payment experiences and to optimize
internal payment management processes and operations. Notable payment management trends uncovered by our survey this year
include an uptick in merchants offering Buy Now Pay Later (BNPL) and subscription payment options, more integration of chatbots,
AI and machine learning to support customer-facing and internal payment operations, and a heightened focus on
tracking several important payment management metrics, or KPIs.
More Merchants Implementing Novel Retail Approaches And Customer Experiences
This year’s results show increasing usage of several novel retail approaches and customer experiences, suggesting that more
merchants may be moving past the experimentation stage with these approaches and aiming for full adoption and integration over the
coming years. Overall, merchants are using an average of 3.6 new retail approaches this year (up from 3.4 last year) and an average of
2.8 new customer experiences (up from 2.6 last year). Detailed, year-over-year data for both of these questions is displayed in
Figure 10, below.
Figure 10: Usage Of New Retail Approaches & Customer Experiences – 2023 vs. 2022
Usage of Retail Approaches

Avg. Number Of Retail Approaches Used: 3.6
2023 2022
(n=1,072) (n=1,060)
38%
Phone orders
35%
38%
Buy online, ship to store (BOSS)
34%
36%
Installments / retail financing (buy now, pay later)
28%
35%
Reserve online, purchase in store
37%
35%
Buy online, pickup in store (BOPIS / ISPU)
37%
35%
Subscription/recurring purchase
25%
30%
Buy online, return in store (BORIS)
28%
30%
Browse in-store on mobile, buy online (BIMBO)
30%
Buy in store, pickup in other store 28%

24%
27%
Research online, purchase offline (ROPO)
29%
20%
Buy offline, return online
24%
7%
None of the above = Sig. Higher vs. 2022 = Sig. Lower vs. 2022
8%

Figure 10: Usage Of New Retail Approaches & Customer Experiences – 2023 vs. 2022
Customer Experiences Offered

Avg. Number Of Customer Experiences Offered: 2.8
2023 2022
(n=1,072) (n=1,060)
40%
Chat bots / customer service AI
34%
40%
Connected devices
34%
29%
Curbside / locker pickup
26%
28%
Biometrics
25%
26%
Face-to-pay
29%
25%
Voice commerce
25%
24%
Self-service kiosks
24%
21%
Augmented reality (AR)
23%
Grab & go 19%

18%
18%
Pop-up shops
19%
14%
None of the above = Sig. Higher vs. 2022 = Sig. Lower vs. 2022
17%
In terms of new retail approaches, there was around a 10% uptick in the share of merchants offering Buy Now, Pay Later options
(also known as installments or retail financing), as well as a similar increase in the share offering subscription or recurring purchase
programs. Over one-third of merchants globally are leveraging these two approaches. As with many other aspects of payment and
fraud management, midsize and enterprise merchants are leading the way in adopting and integrating these into their
selling strategies.
When it comes to new customer experiences, 40% of merchants are now leveraging chatbots or customer service AI programs, as well
as those utilizing connected devices to provide customers with more seamless and streamlined omnichannel experiences. Examples of
chatbot and AI programs introduced by U.S. merchants include Domino’s Pizza’s chatbot called Dom, which makes it easy for customers
to place orders on the go via the Facebook Messenger app and Sephora’s Virtual Artist – a mobile application that allows customers to
“try on makeup instantly” using only a smartphone. Connected devices also enable more seamless payment transactions (e.g., via tap-
to-pay solutions embedded on smartphones), as well as physically touchless transactions – an increasingly critical benefit, following
the global COVID-19 pandemic. With such a sizable share of merchants leveraging these two tactics, their global usage rate now well
exceeds all other new experiences tested in our survey – e.g., curbside pickup, biometric payments and pop-up shops.
Increasing Usage Of Machine Intelligence To Optimize Internal Payment Processes
Merchants tend to employ two to three different approaches or techniques designed to optimize payment authorization, internally.
In particular, usage of machine learning to fine-tune fraud management, as well as intelligent payment routing, have seen increased
adoption over the past year, with around 4 in 10 now utilizing each of these approaches (see Figure 11). Merchants in Asia, as well as
enterprise and mid-market merchants, are using more of these approaches than average, in contrast to small businesses. While fraud
management has historically been seen as a separate function to payment processing, sophisticated fraud management is also seen
today as a means of optimizing payment authorization through its emphasis on lowering of false positives and even influencing issuer
acceptance by achieving lower merchant fraud rates.
Also shown in Figure 11 is the share of merchants saying they use third-party data to support each of these authorization-boosting
approaches. On this question, we saw a small but consistent trend of retrenchment among merchants, with slightly fewer utilizing third-
party data this year, compared to last year, to support authorization-related approaches.

Figure 11: Usage Of Payment Authorization Approaches & Percent Using Third-Party Data With Each – 2023 vs. 2022
% Merchants Using Each Approach 2023 2022

APAC (3.3)
Enterprise (2.9) & Mid Market (2.6)
Avg Number Approaches Used = 2.4
41%
39% 37% 35%
SMB (1.7)
35% 35% 36%
33% 32% 31% 31% 32% 30%
29%
14%
10%
Using machine Intelligent Automated retries Real-time 3D Secure 2 Reducing failed Dynamic None of
learning to payment routing for payments card-on-file usage to improve transactions with currency the above
fine-tune fraud updates using (issuer) approval Account Updater conversion
management tokenization rate
% Using Third-Party Data With Each Approach (among all merchants using each)
72% 71% 66% 69% 66% 70%

64% 67% 65% 61% 66% 62% 58% 56%
Using machine Intelligent Automated retries Real-time 3D Secure 2 Reducing failed Dynamic
learning to payment routing for payments card-on-file usage to improve transactions with currency
fine-tune fraud updates using (issuer) approval Account Updater conversion
management tokenization rate
Merchants Keeping A Closer Eye On Several Payment Metrics, Including Refund Rate
As merchants deploy new customer-facing and internal payment management approaches, they are also keeping a closer eye on a
range of important metrics, or KPIs. On average, merchants now rate 4.1 payment KPIs as extremely important to their organization –
up significantly from an average of 3.7 last year. The shares of merchants who monitor success rate, revenue and cost of payments all
rose significantly since 2022, as did the share who track refund rates (see Figure 12).
Here again, our data show larger merchants taking more advanced and comprehensive approaches to payment management,
with enterprises tracking five of these payment KPIs, on average, while SMBs tend to keep tabs on just three or four.
Figure 12: Payment Management KPIs – 2023 vs. 2022
Top 3 KPIs
MRC Member (6.9)

Enterprise (4.8)
50% Avg Number Used 4.1 (vs. 2022)
48%
45% 45% SMB (3.4)
41%
37%
34%
30% 31% 30% 30% 28%
29% 29% 28% 28%
24% 24% 26% 26%
22%22% 20%
17% 18% 18%
Payment Revenue Cost of Authorization Authenti- Refund Loss rates – Order Settlement Checkout Average Customer Retry
success rate payments Rate cation rate chargeback & conversion time abandon- ticket size NPS based performance
rate fraud rates rate ment rate on shopping
experience
2023 2022
(n= 1,072) (n=1,060) = Sig. Higher = Sig. Lower
Additionally, our data indicates that MRC merchants are especially intent on measuring and monitoring their payment metrics; they track
an average of seven different KPIs tested in our survey – nearly twice as many as the average non-MRC merchant.

3. Business
Impacts
of Fraud
The last three sections of this report shift our focus from ecommerce payments to ecommerce fraud. In this section, we delve into
data around the costs of managing fraud and examine how fraud KPIs have changed over the past year to understand, at a high level,
whether merchants have been more or less successful in applying financial resources to thwart and mitigate the negative impacts of
ecommerce fraud on their businesses. We also revisit the topics of manual order review and the implementation of Strong Customer
Authentication (SCA) to understand how merchants are thinking about and acting on these issues, now and in the near future.
Fraud-Related KPIs Exhibit Encouraging Declines, Especially On Domestic Orders
Following a turbulent year in which fraud KPIs increased across the board, merchants reported some improvement in fraud-related
KPIs over the past 12 months, especially in relation to domestic business. As evidenced by the data table in Figure 13, the percentage
of ecommerce revenue lost to fraud globally, order rejection and fraud rates on domestic orders, and the share of ecommerce orders
that led to fraud-related chargebacks all declined significantly versus the prior year.
Decreased negative fraud metrics were particularly dramatic in North America, where we saw spending on fraud management increase
markedly last year. APAC-based merchants, midsize and enterprise merchants, and both MRC members and non-members also cited
statistically significant declines in various key metrics, in line with the general, positive trend this year of declines across the board.
Figure 13: Fraud Management KPIs – 2023 vs. 2022
Fraud Management KPIs By Region By Revenue By MRC Status

(2022 figures in blue)
Trimmed averages shown for all KPIs North Europe APAC LAT AM Mid- Non- MRC
2022 2023 SMB Enterprise
America Market Member Member
% of eCommerce revenue lost to 2.4 3.1 2.9 4.6 2.7 3.3 2.8 3.2 0.3
3.6 2.9
payment fraud globally 3.6 3.0 4.3 4.2 2.9 4.1 3.7 3.7 0.7
% of eCommerce revenue lost to 2.4 3.3 3.0 3.9 2.8 3.2 2.9 3.2 0.2
payment fraud from domestic orders 3.4 3.0
3.6 2.8 3.3 3.6 3.0 3.8 3.4 3.5 0.4
Order rejection rate for domestic orders 3.4 2.7 2.4 2.7 3.2 3.3 2.1 2.9 3.1 2.8 1.8
3.6 2.8 2.9 4.4 2.8 3.9 3.6 3.4 2.1
Order rejection rate for 5.3 4.4 5.3 6.0 6.1 4.1 5.3 5.8 5.5 2.9
6.0
international orders 6.3 5.1 5.3 7.0 5.3 6.7 6.0 6.1 3.0
% of domestic eCommerce orders 2.6 2.2 2.9 2.5 3.5 2.3 3.1 2.6 2.8 0.3
3.1
that turned out to be fraudulent 3.2 2.7 2.9 3.4 2.6 3.7 3.1 3.2 0.6
% of international eCommerce orders 3.0 2.5 3.2 2.6 3.8 2.7 3.1 3.0 3.2 0.3
3.4
that turned out to be fraudulent 3.3 3.0 3.7 4.0 3.0 3.8 3.3 3.5 0.7
% of eCommerce orders that led to 2.6 2.2 2.7 2.8 3.7 2.4 2.8 2.8 2.8 0.2
3.1
chargebacks (due to fraud) 3.4 2.3 2.9 3.8 2.6 3.7 3.3 3.2 0.2
= Sig. Decrease In Fraud KPI = Sig. Increase In Fraud KPI

Spending On Fraud Management Remains Relatively Consistent
Globally, merchants continue to spend about one-tenth of their annual ecommerce revenue to manage payment fraud – a figure that
has stayed quite consistent for three consecutive years in our study. We have also seen a notable decline in the share of merchants who
tell us that they “don’t know” or “don’t track” this metric – from 30% in our 2021 study to 23% this year – suggesting that merchants are
keeping a closer eye on fraud management spending as time goes on (see Figure 14).
Figure 14: Spending To Manage Payment Fraud (Relative To Annual Ecommerce Revenue)
% Of Annual Ecommerce Revenue Spent To Manage Payment Fraud

Trimmed medians shown for all cost estimates.
Overall 2023 - Key Breaks
Region: 15% 19%

10% 10% (+6%) (+8%)
North America Europe APAC LAT AM

10% 10% 11%
2021 2022 2023 Ecommerce

Revenue: 12% (+6%) 10% 12%
30% don’t 25% don’t 23% don’t
know or don’t know or don’t know or don’t SMB Mid-Market Enterprise
track track track
MRC
Membership: 12%
0.1%
MRC Members Non-MRC Members
(Parentheses show noteworthy trends compared to 2022:

green text indicates an increase & red text indicates a decline)
From a geographic perspective, merchants in North America and Europe are spending about the same this year as they did last year to
manage payment fraud. By contrast, those in APAC and Latin America have markedly increased spending over the past year – by 6% for
the former and 8% for the latter. In fact, merchants in LAT AM are now spending nearly twice as much as the global average to manage
payment fraud (19% versus 11%).
Also noteworthy is the increased spending on fraud management among the smallest merchants in our study – SMBs that generate
between $50,000 and $5 million in annual ecommerce sales. These merchants essentially doubled their estimated fraud management
spending over the past year, from 6% to 12% of ecommerce revenue.
In last year’s study, we saw merchants in North America increase their fraud management spending dramatically, and that was followed
by significant declines in the fraud KPIs they reported to us this year (see Figure 13). If a similar pattern holds true, merchants in APAC
and Latin America, as well as SMBs, should see positive effects from their increased spending in the form of improved fraud metrics over
the year to come.
Manual Order Review Still Important In Fraud Prevention, But Most Want To Reduce It
As illustrated by the data in Figure 15, over 60% of merchants plan to eliminate or reduce the amount of manual order review they
engage in as part of their fraud prevention efforts – a proportion that has remained consistent over our past three years of research.
Merchants based in APAC are significantly less likely to take this view, however, and instead far more likely than those in other regions
to say they will only conduct manual reviews for business-specific policies (e.g., when shipping to certain countries or handling
orders for certain products).

Figure 15: Role Of Manual Review In Merchants’ Fraud Prevention Strategies (2023)
2023 - Overall 2023 - By Merchant Segment
Region:
14% 15% 47% 12% 25%
North America
Plan to eliminate it
63% plan to Europe 15% 54% 15% 16%

eliminate
or reduce APAC 43% 29% 22%
Will always have it, 49% manual review
6%
but want to reduce it

LAT AM 15% 57% 13% 14%
Will only review for Size:

business specific policies* SMB 19% 48% 12% 21%
16%
Mid-Market 13% 57% 14% 16%
Remain a core part of
the strategy 21%
Enterprise 9% 47% 20% 24%
Membership
(*policies include the likes of 1 PS5 per MRC Members 24% 41% 0% 35%
customer, only ship to certain countries, etc.)
Non-Members 13% 50% 17% 20%
= Sig. Higher vs. others in 2023 = Sig. Lower vs. others in 2023
Size of business also matters when it comes to future plans for manual review, as SMBs are more likely to say they plan to eliminate this
process entirely, while enterprises are significantly less likely to attempt this approach.
Just as merchants’ plans and expectations concerning manual review have remained relatively consistent over the past few years, so
too have their actions, in terms of carrying manual reviews out, in practice. After registering a slight decline last year in the share of
ecommerce orders manually screened and subsequently declined, these figures ticked upward slightly in this year’s survey. Globally,
merchants now screen an average of 19% of all ecommerce orders manually, 15% of which they end up declining (see Figure 16). In
other words, merchants manually screen about one out of five online orders they receive, and out of all of the orders that they review,
they end up declining around one out of seven.
Figure 16: Screening & Declining Ecommerce Orders Using Manual Review
% of eCommerce orders manually screened & subsequently declined % of manually reviewed orders that are subsequently declined
Region:
15% 17% (+5%) 19% (+7%)
20% 11%
18% 19%
17% of reviewed 12% of reviewed 15% of reviewed
orders declined orders declined orders declined
North America Europe APAC LAT AM
Size:
3% 14% 13% 16%
2% 3%
2021 2022 2023 SMB Mid-Market Enterprise
25% “Don’t Know” Or 24% “Don’t Know” Or 20% “Don’t Know” Or Membership
“Do Not Conduct “Do Not Conduct “Do Not Conduct 21% 15%
Manual Review” Manual Review” Manual Review”
MRC Members Non-Members

(Parentheses show noteworthy trends compared to 2022:
green text indicates an increase & red text indicates a decline)
Merchants in the Asia-Pacific and Latin America regions significantly increased the share of manually screened orders that they ended
up declining, compared to the previous year, which may partly explain why spending on fraud management also rose significantly for
merchants in these two regions (see Figure 14).

Notably, MRC members approach manual review quite differently than non-members. As shown in Figure 15, MRC members are far less
likely to conduct reviews based on business-specific policies and instead more likely to say they either plan to eliminate reviews entirely
or to retain manual reviews indefinitely as a core part of their strategy. In addition, MRC members decline a greater percentage of their
manually screened orders than non-members – 21% for the former, compared to 15% for the latter (see Figure 16). These data could
indicate that either MRC merchants are faced with a higher share of fraudulent orders than non-members or that they have different
tools, tactics or techniques in place for conducting manual review, which result in them declining a somewhat higher percentage of the
orders they screen manually.
The differences in manual review metrics between MRC members and non-members, as well as large enterprise merchants and smaller
merchants more generally, may indicate that the latter segments are leading the way in figuring out how, where and when to best apply
technological solutions versus human expertise and labor to tackle the problem of manual review.
Implementation Of SCA Is Well Underway, But Most Have Yet To Complete The Process
Progress is well underway, in terms of merchants implementing Strong Customer Authentication (or SCA), which is required to comply
with the EU’s updated Payment Services Directive, or PSD2. But while 86% of merchants have started to implement SCA, only 45% say
they have done so fully – in other words, most still have work to do to complete the implementation process (see left side of Figure 17).
Figure 17: Merchant Implementation Of Strong Customer Authentication (SCA)
2023 - Overall 2023 – By Key Breaks
% Not Implemented At All % Partially Implemented % Fully Implemented

NET % Partially Or Fully Implemented: 86%
43% 52% 53%
35% 45% 43% 48% 33%
We have fully Region: 10% 4% 4% 10%
implemented SCA
45% North America Europe APAC LAT AM
We are in the process

50% 46% 56%
of implementing SCA 41% 31% 38%
Size: 16% 3% 3%
SMB Mid-Market Enterprise

We have not yet
41%
started to implement SCA
56% 43% 44%
Membership 16% 7% 7%
I am not familiar 8%
enough to say 6% MRC Members Non-Members
Note: Percentages for “not familiar enough to say”

= Sig. Higher vs. other Segments = Sig. Lower vs. other Segments
excluded from charts above.
As shown in the data on the right-hand side of Figure 17, Europe- and APAC-based merchants are leading the charge to implement
SCA from a geographic perspective, while enterprises and are farthest along among business in different size segments.
The majority of MRC members surveyed have fully implemented SCA, but there also seems to be a segment of MRC merchants who
are lagging behind, as 16% have not yet begun the process at all, compared to only 7% among non-MRC members.
For the past three years, we have asked merchants what impacts SCA implementation is having or will have on their business. Looking
at their responses to this question over time (as shown in the left side of Figure 18) reveals an interesting trend: As time has passed
and merchants have gotten further into the implementation process, the percentages who say SCA implementation has increased the
complexity of managing payments and managing fraud have significantly declined. Conversely, the share of merchants who say this
process has increased the complexity of how they manage compliance has sharply risen. Currently, merchants seem to be evenly split
on all three of these dimensions, with roughly half saying implementation has increased complexity in each of the three areas.

Figure 18: Business Impacts Of SCA Implementation (2021-2023) & Planned Usage Of SCA Exemptions (2023)
Overall % Citing Each Type Of Impact (2021-2023) % Planning To Use Each Type of Exemption (2023)
Recurring transaction 41%

Secure Corporate Payment (SCP) exemption 40%
61%
56% 54% 56% 54% Transaction Risk Analysis (TRA) exemption 39%
49% 49%
Trusted merchant exemption 37%
34% Merchant Initiated Transaction (MIT) 34%
Low value exemption 28%
23%
Delegated authentication exemption 26%
Mail order telephone order 23%
One leg out 10%
Increased Increased Increased I am not familiar enough to say 6%
Enterprises (3.4)
Avg Number Selected = 2.9
complexity in complexity in complexity in
managing payments managing fraud managing compliance None of the above 6% SMB (2.2)
MRC Member (2.2)
2022 2022 2023 = Sig. Lower = Sig. Higher
This year, we added one additional question on the subject of SCA to understand what types of SCA exemptions merchants plan to use
in the future. This data is shown on the right side of Figure 18. Overall, merchants cited an average of around three SCA exemptions
they plan to use, with recurring transactions, Secure Corporate Payment, and Transaction Risk Analysis exemptions being selected by
around 4 in 10 merchants, respectively. Trusted merchant and Merchant Initiated Transaction exemptions were also popular, with over
one-third planning to use each of those, as well.
Not surprisingly, enterprise merchants over-index on the number of exemptions they will likely make use of, while the opposite is true
for small businesses. MRC Members also under-index when it how many exemptions they plan to use, averaging only 2.2, versus 2.9
among non-members (see right side of Figure 18). In fact, MRC members are more likely than most to say they have no plans to use any
SCA exemptions, given that 14% of them selected this response, in contrast to just 6% among non-members.

4. Fraud Attacks
& Challenges
This section starts by examining the most prevalent types of fraud ecommerce merchants experience and how their incidence fluctuates
over time and across different segments of the merchant population. First-party misuse, or “friendly fraud,” is one particular focus
in this area of insights. Next, we move on to review merchants’ top fraud-related challenges, as well as the most important areas for
improvement that merchants will be prioritizing in their fraud-prevention efforts over the next 12 months.
Top Fraud Attacks Remain The Same Overall, With Friendly Fraud Rising From #4 To #2
Globally, the four most widespread forms of fraud stayed consistent for the third consecutive year of our study. These top four fraud
attacks, from most to least prevalent, are phishing / pharming / whaling, first-party misuse (also known as “friendly fraud”), card testing
and identity theft (see Figure 19).. Consistent with prior years of our study, merchants were impacted by three different types of fraud, on
average, with SMBs under-indexing around two and large enterprises more apt to grapple with four or more.
Figure 19: Types Of Fraud Experienced By Merchants – Past 3 Year Rankings & Global Incidence (2023)
2021 Rank 2022 Rank 2023 Rank Global % Experiencing (2023)

Phishing / pharming / whaling 3 1 1 43%
First-Party Misuse (i.e., friendly / chargeback fraud) 1 4 2 34%
Card testing 2 2 3 33%
Identity theft 4 3 4 33%
Coupon / discount / refund abuse 5 7 5 30%
Account takeover 7 5 6 27%
Loyalty fraud 6 6 7 22%
Affiliate fraud 8 8 8 22%
Re-shipping 12 11 9 20%
Botnets 10 9 10 19%
Triangulation schemes 9 10 11 17%
Money laundering 11 12 12 15%
AVG. # of attacks experienced 3 3 3 3
Increased Ranking Decreased Ranking = Sig. Higher vs. 2022
Looking at how incidence of fraud attacks has shifted since our 2022 report, phishing / pharming / whaling attacks showed a significant
increase in global incidence, with 43% of merchants experiencing this type of fraud, up from 35% last year (see Figure 19). The rate of
first-party misuse also ticked upward, affecting just over one-third of merchants globally, which put its incidence just above that of card
testing and identity theft. Occurrences of coupon / discount / refund abuse increased from 25% to 30%, vaulting that type of fraud back
up to #5 overall, from #7 last year. And further down the list, the share of merchants impacted by re-shipping schemes also rose by 5%,
from 15% to 20% in this year’s study. This increase ranks re-shipping in the top 10 most common types of fraud for the first time the past
three years.

MRC Members Continue To Combat A Larger Number And Variety Of Fraud Attacks
This year’s survey once again highlighted a huge difference between MRC members and non-members, in terms of the number and
variety of fraud attacks experienced by each group. As illustrated by the data in Figure 20, MRC merchants continue to register and
report more than twice as many forms of fraud as non-members – six, on average, compared to three for non-members. In particular,
MRC members are far more likely to experience friendly fraud (91%), card testing (85%), coupon / discount / refund abuse (57%), and
account takeover (83%). In addition, the majority of MRC members must also grapple with less-common forms
of fraud – e.g., botnets and triangulation schemes (57%, respectively).
While this trend of MRC merchants reporting more attacks than non-members has been clear and consistent over the past few years of
our survey, it remains an open question whether this is due to MRC members actually experiencing a larger number and range of attacks
or to MRC members having more fraud detection tools in place, which allows them to identify and register a larger share of the attacks
that impact their businesses (or some combination of the two).
Figure 20: Fraud Attack Incidence Rates By MRC Membership Status (2023)
% Non-Members Experiencing % MRC Members Experiencing

(N=576) (N=46)
Phishing / pharming / whaling 42% 54%
First-Party Misuse (i.e., friendly / chargeback fraud) 29% 91%
Card testing 29% 85%
Identity theft 31% 50%
Coupon / discount / refund abuse 27% 57%
Account takeover 23% 83%
Loyalty fraud 22% 26%
Affiliate fraud 23% 20%
Re-shipping 18% 48%
Botnets 16% 57%
Triangulation schemes 14% 57%
Money laundering 15% 17%
AVG. Number of attacks experienced 3 6
= Sig. Higher for MRC Members = Sig. Lower for MRC Members
In Figure 21, we drill into this data a bit more to display the top five most prevalent forms of fraud faced by merchants in each geographic
region and size segment. Comparing this year’s data to last year’s, the incidence of phishing / pharming / whaling attacks rose spiked
significantly among merchants in Europe and APAC, as well as among mid-market merchants, in general.
There was also a significant year-over-year increase in the incidence of friendly fraud affecting enterprise merchants.
Looking at differences in fraud attacks across merchant segments, Figure 21 shows that APAC merchants are more likely than those in
other regions to experience both identity theft and loyalty fraud. On the right side of the graphic, there is also a clear pattern indicating
that SMBs are significantly less likely to experience most forms of fraud, while the converse is true for enterprise merchants. This
pattern is similar to the one between MRC and non-MRC members highlighted in Figure 20, in that the difference in fraud rates for SMBs
and enterprises may be due to enterprises suffering more attacks, to enterprises having more tools and techniques in place to help them
recognize and register attacks, or to some combination of the two.

Figure 21: Top Forms Of Fraud Experienced By Region & Size Segment (2023)
Top 5 Attacks By Region Top 5 Attacks By Size Segment
N.America Europe APAC LATAM SMB Mid-Market Enterprise

(n=259) (n=164) (n=112) (n=84) (n=218) (n=129) (n=275)
Phishing / Phishing / Phishing / Phishing / Phishing / Phishing /

1 Pharming / Whaling Pharming / Whaling Pharming / Whaling Card Testing Pharming / Whaling Pharming / Whaling Pharming / Whaling
Coupon / Discount /
2 Card Testing First-Party Misuse Identity Theft
Refund Abuse Card Testing Identity Theft First-Party Misuse
Phishing /
3 First-Party Misuse Identity Theft Loyalty Fraud
Pharming / Whaling
First-Party Misuse Card Testing Identity Theft
Coupon / Discount / Coupon / Discount /

4 Identity Theft Refund Abuse First-Party Misuse Account Takeover Refund Abuse
First-Party Misuse Account Takeover
Coupon / Discount /
5 Refund Abuse Card Testing Card Testing Identity Theft Identity Theft Affiliate Fraud Card Testing
Avg. Number fraud attacks experienced
3 3 4 3 2 3 4
= Sig. Higher incidence vs. 2022 = Sig. Lower incidence vs. 2022
Friendly Fraud Still A Pervasive Problem, But Merchants Optimistic About New Solutions
First-party misuse, also called “friendly fraud” or chargeback fraud, affects over one-third of merchants, globally, ranking this the #2
most widespread type of fraud tracked by our survey. Merchants estimate that nearly one-fifth of all fraudulent disputes should be
attributed to friendly fraud, and over 6 in 10 have reported an increase in first-party misuse disputes since 2021 (see Figure 22). This
form of fraud is also especially costly to combat, with merchants estimating they have to spend (USD) $35 to manage friendly fraud for
every $100 they face in disputes.
Figure 22: Key Statistics Concerning First-Party Misuse (Friendly Fraud)
34% 18% $35* 62%

…of merchants have …of all fraudulent disputes …is the estimated cost to report an increase in
experienced should be attributed manage friendly fraud friendly fraud
first-party misuse to first-party misuse. (for every $100 in disputes). disputes since 2021.
(friendly fraud).
More so for MRC Members (26%). *Trimmed average shown More so for those in APAC (72%).
Incidence of friendly fraud has
increased among Enterprises (+10%)
To some extent, the regular occurrence and recent increases in friendly fraud attempts lies beyond merchants’ control, as illustrated by
the data in Figure 23, showing the top drivers of friendly fraud disputes (on the left), as well as the top reasons why this type of fraud has
increased over the past few years (on the right). There will always be some proportion of customers who fraudulently attempt to obtain
free goods in this manner, and merchants can do little to tamp down macroeconomic inflation / higher prices and the steady, global
increase in ecommerce sales or demand that they think is spurring the recent rise in first-party misuse.

Figure 23: Drivers Of First-Party Misuse And Reasons For Rising Incidence Since 2021
Common Types of First-Party Misuse Reasons For Increasing First-Party

(Drivers For Submitting Disputes) Misuse Disputes (since 2021)
Attempt to obtain free goods or services 58% MRC Members (86%) Inflation / higher prices 52%
Transaction or descriptor 47% N, America (35%)

confusion Increase in eCommerce sales / demand 50%
Family fraud 40% Europe (19%)
Changes to cardholder protections on
accepted payment cards 41%
Transaction amount confusion 40%
Wanting to return goods outside Changing / adding new eCommerce
of your company’s return period 36% customer bases 39%
Unwanted subscription / recurring charges
(e.g., customer forgot to cancel) 36% Changing / adding new eCommerce
system or payment solution providers 34% APAC (58%)
Buyer’s remorse 35%

Changing / adding new
Quality of goods not as expected APAC (50%) eCommerce sales channels 31%
27% SMB (11%)
= Sig. Higher vs. Other Segments 2023 = Sig. Lower vs. Other Segments 2023
This is not to say, though, that merchants are powerless to prevent or reduce friendly fraud. In fact, they are advancing quickly to
implement a range of key strategies and tactics aimed at thwarting first-party misuse, and most are optimistic that recent changes to
card brands’ compelling evidence rules will help them to further mitigate this pernicious problem.
Merchants’ top strategies and tactics for combating friendly fraud are shown in Figure 24. As indicated by the green arrows in the
graphic, there has been a significant increase in the share of merchants leveraging multiple key tactics and techniques aimed at
mitigating this form of fraud, such as making return and cancellation policies clearer and easier to find, monitoring transaction data for
unusual activity, blacklisting customers who file chargebacks and working more closely with payment and fraud providers to identity and
prevent friendly fraud attempts.
Figure 24: Strategies And Tactics For Tackling First-Party Misuse (Friendly Fraud)
% Using Each Approach To Combat First-Party Misuse

(among n=210 experiencing friendly fraud)
Revoking access to services / purchases for customers who file chargebacks 48% Notifications & Visibility 81%
Making cancellation and return policies clear and easy to find on website 47% (+13%)
Flagging & Checking 73%
Requiring Card Verification Values (CVV) codes to process card payments 46%
Monitoring & analyzing transaction data for unusual activity or anomalies 45% (+18%) Verification & Identification 73%
Checking customer purchase and order histories 43% Enhanced Requirements 59%
Filing formal disputes on fraudulent chargebacks with financial partners 41%
Blacklist customers who file chargebacks 40% (+14%) Filing & Fighting 53%
Working with providers to prevent or identify fraudulent transactions 40% (+13%)
Notifying customers when orders are processed / delivered 38% (+12%)
Verifying billing addresses entered match billing addresses for cards used 37%
Reviewing & analyzing non-fraud chargebacks and declines 36%
Notifying customers after processing their payment 32%
Requiring signature on delivery 30%
Notifying customers before processing their payment 30%
Prioritizing certain types or categories of chargebacks to fight 27%
= Sig. Higher vs. 2022 = Sig. Lower vs. 2022

Beyond embracing a broader array of friendly fraud-fighting tactics and techniques, merchants are also making great use of card brands’
compelling evidence rules to combat this issue. Around 9 in 10 currently submit compelling evidence to resolve these types of disputes,
and nearly three-quarters (72%) are already aware of major card brands’ recent updates to compelling evidence rules, which are aimed at
helping merchants tackle this issue more effectively (see Figure 25). Among those in the know, the vast majority – 89% – expect these
recent rule updates to help them solve or reduce the problem of friendly fraud.
Figure 25: Usage Of Compelling Evidence To Mitigate The Problem Of First-Party Misuse
Current Approaches To Using Compelling Evidence Expected Impact Of Major Card Brands’
Updates To Compelling Evidence
89% 89%
MRC Members (88%) 49%
40%
72% Europe (58%)
8%
Will Help Will Help Won’t Really

A Lot A Little Help
Submit compelling Are aware of major Collect and store

evidence to respond card brands’ the necessary data 89% expect these updates will help
to first-party updates to to take advantage them solve or reduce the
misuse disputes. compelling of these updates. problem of first-party misuse.
evidence policies.
(i.e., 12 months of transaction
data, IP address, device
fingerprint, item info, customer
account, delivery address)
Making Better Use Of Data & Analytics To Manage Fraud Is Now A Top Priority
In addition to identifying, preventing and mitigating various forms of fraud at the tactical level, merchants must also manage a wide array
of strategic fraud management challenges and priorities. As the data in Figure 26 illustrate, challenges related to fraud management
have steadily grown for merchants, globally, over the past three years.
Figure 26: Top Challenges In Managing Ecommerce Fraud
% Experiencing Each Challenge In The Past 12 Months (2021-2023)
2023 2022 2021

(N=622) (N=677) (N=650)
38%
34%
33% 31% 32% 31% 32%
29% 30% 30% 30% 30% 30% 29%27%
28%
26% 25% 27%
23% 24% 24%
22% 23% 22%21% 22% 21% 21%
22%
19% 19% 17%
8% 9% 8%
Effectively Identifying / Keeping up to Challenging Updating fraud Expanding Gaps in Lack of Lack of internal International Managing None of the
using data responding to date on rule business risk models into new fraud tool sufficient expertise expansion omni-channel above
to manage emerging fraud changes by models quickly sales functionalities internal fraud
fraud attacks payment / card because of channels resources
networks COVID-19
= Sig. Higher in 2023 = Sig. Lower in 2023

As challenges have increased, so too have merchants’ needs to make improvements in a range of strategic solutions and capabilities
related to fraud management. This dynamic is reflected in the data in Figure 27, below, which shows a strikingly similar pattern to the
data in Figure 26. What’s clear and noteworthy at a high level from these two trends over the past three years is that both challenges
and opportunities for improvement related to ecommerce fraud management are steadily increasing from merchants’ point of view.
Figure 27: Top Areas For Improvement In Managing Ecommerce Fraud
% Prioritizing Each Improvement Area In The Next 12 Months (2021-2023)
2023 2022 2021

53% (N=622) (N=677) (N=650)
44%
42% 41%
38% 38%
35% 35% 34% 35%
33% 33% 33%
30% 30% 29% 31%
28% 28% 29% 28%
26% 25%
23% 22% 23% 21%
4% 6% 4%
Improving fraud Automated Improving Streamlining Capturing & Better managing Creating Dealing with Outsourcing None of
analytics detection chargeback manual review utilizing the of omni- mobile-specific increased portions of the these
accuracy dispute process tasks & workflow right data channel fraud fraud rules cross-border review / screening
transactions operation
= Sig. Higher in 2023 = Sig. Lower in 2023
At a higher level, these data highlight how one particular type of fraud-related challenge has recently become much more salient to
a large swath of merchants around the world over the past few years, and that is the usage of data and analytics to more effectively
manage and combat fraud. Ideally, ecommerce merchants and their payments and fraud partners can make use of the insights and
analysis reported in this study, and others like it, to help address this growing need. As the complexities of fraud, global ecommerce,
compliance and consumer behavior changes, the use of insights to better understand how effectively they are at managing fraud and
increasing revenue remains more important than ever.
Moreover, this trend reflects a broader theme evident throughout this year’s report of ecommerce merchants needing and trying to
better leverage technology in their management of both ecommerce payments and ecommerce fraud. In many questions throughout
our survey, we saw significant spikes in the share of merchants making use of more sophisticated technologies, such as automation,
artificial intelligence, machine learning, along with the massive streams of relevant data and analytics that support and feed these
advanced solutions.

5. Fraud
Prevention
The final section in this year’s report examines how merchants are moving to prevent ecommerce fraud at both the strategic and tactical
levels. First, we examine merchants’ overall fraud management priorities and how those have evolved over time. Then we review which
fraud prevention tools and tactics merchants are using and how effective those are, as well as which additional tools merchants are
most likely to invest in, moving forward.
Reducing Fraud & Chargebacks Remains #1 Priority Guiding Fraud Prevention Strategies
Continuing a trend from last year’s survey, when it comes to the top priority guiding merchants’ fraud management strategies,
they are still most likely to prioritize preventing fraud and chargebacks, versus improving CX (customer experience) or minimizing
costs (see Figure 28). This strategic approach is generally consistent across merchants in different regions and size segments,
although those based in Latin America show a more equal split on this question, with 40% citing CX improvement as their primary
imperative and 39% citing fraud and chargeback reduction.
Figure 28: Top Priority Guiding Fraud Management Strategy – 2021-2023
Most Important Priority For Fraud Management
Reducing fraud and

chargebacks 40% 46% 46%
Improving the customer

experience
50% 37% 36%
Minimizing fraud-related
operational costs
11% 17% 18%
2021 2022 2023

(N=650) (N=677) (N=622)
= Sig. Higher vs. 2021 = Sig. Lower vs. 2021
The fact that this year’s survey showed significant improvement in many important fraud KPIs may be evidence that merchants’
sustained focus on fraud and chargeback reduction is starting to bear fruit (see Figure 13). Moving forward, merchants will ideally be
looking to continue gaining ground in the fight against fraud while maintaining strong CX and keeping costs in check.

Merchants Utilizing An Increasing Array Of Fraud Prevention Tools
Shifting from merchants’ strategic priorities to the tactical tools they rely on to detect and prevent fraud, the survey shows a significant
increase in the average number of tools currently in use, from four last year to five this year. Eight out of the 15 different tools tracked by
the survey registered a significant uptick in usage by merchants, globally, over the past year (see Figure 29).
These include the three most widely used tools (credit card verification services, identity verification services and two-factor phone
authentication), as well as a handful of tools used by one-quarter to one-third of all merchants (credit history checks, biometric
indicators, fraud scoring models, multi-merchant purchase velocity models, and order velocity monitoring). In general, the tools showing
the biggest increases in usage over the past year are also the ones selected by the largest shares of non-users as tools they plan to
adopt in the future.
Figure 29: Current & Planned Usage Of Fraud Detection Tools
Current & Future Usage of Fraud Detection Tools
Currently Use Plan To Use In The Future (among those not currently using)
Credit card verification services 55% (+14%) 13%
Identity validation / verification services 50% (+11%) 12%
Two-factor phone authentication 44% (+7%) 10%
3-D Secure authentication 39% 15%
Internal customer order history / website behavior analysis 34% 10%
Geographic indicators and comparisons 30% 13%
Credit history checks 32% (+7%) 11%
List management 32% 11%
Biometric indicators 27% (+5%) 12%
Fraud scoring model – company specific 27% (+6%) 10%
Device-based results 31% 7%
Multi-merchant purchase velocity / identity morphing models 25% (+6%) 8%
Order velocity monitoring 23% (+5%) 6% 5

fraud detection tools are
Search engine results 24% 6% currently used, on average
(sig. increase from 4 in
21% 8% 2022).
Social networking sites
Note: Parentheses indicate significant increases in usage since 2022.
Figure 30, below, shows the top five tools used by merchants in each region and size segment, as well as which tools were implemented
by a significantly larger share of merchants in each segment over the past year. As indicated by the green arrows in each column of
the graphic, merchants in almost every segment significantly increased their usage of at least one of these top tools, with merchants in
North America and enterprises reporting increased usage of most of them. The figures at the bottom of Figure 30 highlight how APAC
and LATAM-based merchants, as well as enterprises, use significantly more tools than those in
other segments.
The data in Figure 30 once again underscore a bit of recent rebalancing on merchants’ part toward applying “best practice” tools like
two-factor authentication and identity verification, versus more sophisticated tools supported by artificial intelligence or machine
learning algorithms.

Figure 30: Top 5 Fraud Detection Tools Used By Region & Size (2023)
Top 5 Tools Used By Region Top 5 Tools Used By Company Size
N.America Europe APAC LATAM SMB Mid-Market Enterprise

(n=259) (n=164) (n=112) (n=84) (n=218) (n=129) (n=275)
Credit card Credit card Credit card Two-factor Credit card Identity validation Credit card
1 verification services verification services verification services authentication verification services / verification verification services
Identity validation Identity validation Identity validation Customer order Identity validation Credit card Identity validation
2 / verification / verification / verification history / verification verification services / verification
Two-factor 3DS auth. / Two-factor Credit card Two-factor Two-factor Two-factor

3 authentication SafeKey authentication verification services authentication authentication authentication
Customer order Two-factor 3DS auth. / SafeKey Identity validation 3DS auth. / Credit history 3DS auth. /
4 history authentication / verification SafeKey checks SafeKey
3DS auth. / Credit history Biometric Credit history Customer order 3DS auth. / Device-based
5 SafeKey checks indicators checks history SafeKey results
Avg. Number of fraud detection tools used
4.7 4.7 5.7 5.5 3.5 4.8 6.2
= Sig. Higher in 2023 = Sig. Lower 2023
Consistent with past years of this survey, MRC members continue to use a much larger array of fraud detection and prevention tools
than non-members: nine, on average, versus five among non-members (see Figure 31). This dynamic may be driven in part by the fact
that 6 in 10 MRC members currently outsource fraud tools, while only 35% of non-members do the same.
Figure 31: Usage Of Fraud Detection Tools Among MRC Members vs. Non-Members (2023)
Geographic indicators and comparisons 91%

28%
Fraud scoring model – company specific 85%
23%
Search engine results 83%
19%
Biometric indicators 83%

26%
Internal customer order history / website behavior analysis 76%

31%
Identity validation / verification services 76%

48%
List management 74%
27%
Credit card verification services 74%
53%
3-D Secure authentication 57%

38%
Order velocity monitoring 43%
22%
Social networking sites 41% MRC Members

19%
Non-Members
Multi-merchant purchase velocity / identity morphing models 30%
24%
Device-based results 26% MRC members use 9 tools

27%
on average, versus 5 tools
Two-factor phone authentication 22% for non-members
46%
Credit history checks 9%
34%
= Sig. Higher Usage = Sig. Lower Usage

Among MRC Members Among MRC Members

Most Effective Tools Are Generally Used Most Widely, With A Few Notable Exceptions
As merchants have adopted and implemented more fraud prevention tools in recent years, they have generally been successful
at choosing the ones that are most effective. The data in Figure 32 reflect this good overall correlation between tool usage and
effectiveness. There are a few notable exceptions, however, which might help inform future adoption and investment plans for
merchants: fraud scoring models, biometric indicators, and multi-merchant purchase velocity / identity morphing models are all seen as
highly effective but have yet to be widely adopted.
Figure 32: Usage Vs. Effectiveness Of Fraud Detection Tools
95%
Lower Usage, Higher Usage & Fraud Detection Tools (From most to least used)
High Effectiveness Effectiveness
A Credit card verification services

90%
B Identity validation / verification services
K D C Two-factor phone authentication

Effectiveness (% Rating Very Or Extremely Effective)
85%
C D 3-D Secure authentication
L H
Internal customer order history /
J E website behavior analysis
80% E
B F List management
A
G Credit history checks
75% F
I H Device-based results
G
I Geographic indicators and comparisons
70% N
J Fraud scoring model – company specific
K Biometric indicators
65% O
Multi-merchant purchase velocity /
L identity morphing models
60%
M Search engine results
M N Order velocity monitoring

Lower Usage Higher Usage,
55%
& Effectiveness Low Effectiveness O Social networking sites
10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%
Usage (% Currently Using)

Conclusion
The insights and findings captured in this year’s survey paint a vivid and encouraging
picture of how ecommerce merchants are managing payments and fraud, globally. At a
high level, merchants are clearly making meaningful progress and advancement in their
approaches to both payments and fraud management.
They are offering customers a wider range of payment methods, such as BNPL and local
digital payments, making increased use of sophisticated technologies to innovate and improve
payment and retail experience (e.g., AI chatbots and connected devices), utilizing multiple
marketplace, processor and acquirer partners to optimize both customer-facing and back-end
payment processes, and tracking an increasing array of payment metrics and KPIs, so they can
further enhance and optimize their payment strategies, in the future.
When it comes to managing and mitigating ecommerce fraud, merchants’ steady strategic
focus on reducing fraud and chargebacks and their consistent, robust spending on
fraud management is paying quantifiable dividends in the form of significantly improved
fraud KPIs. They are tackling thorny issues like friendly fraud head-on, collaborating
with payment partners to quickly introduce new anti-fraud processes and solutions, and
investing in a steadily expanding arsenal of anti-fraud
tools and technologies.
Fraudsters are always looking for the next opportunity to find a hole in the process, and
merchants will always have more work to do and new problems to face when it comes to
preventing fraud. And, with consumer demands ever-changing at a rapid pace, managing
ecommerce payments can also be challenging for merchants. But the data and trends in
this year’s report provide good reason for optimism that they can continue to advance and
achieve success in both of these challenging arenas.

About the authors
Cybersource is a global, modular payment management platform built on secure Visa infrastructure with the benefits and insights of
a vast $427 billion global processing network. This solution helps businesses operate with agility and reach their digital commerce
goals by enhancing customer experience, growing revenues and mitigating risk. For acquirer partners, Cybersource provides a
technology platform, payments expertise and support services that help them grow and manage their merchant portfolio to fulfil their
brand promise.
For more information, please visit: cybersource.com
Merchant Risk Council (MRC) is a non-profit global membership organization connecting eCommerce fraud prevention and payments
professionals through educational programs, online community groups, conferences, and networking events. Encompassing 600+
companies, including 400+ merchants, it provides education on fraud prevention, payments optimization, and risk management. The
MRC was established in 2000 and continues to be at the forefront of industry evolution by focusing its efforts on optimizing payments
and reducing eCommerce fraud through collaboration, networking, education, and advocacy.
For more information, please visit: merchantriskcouncil.org
Verifi, A Visa Solution is a leading provider of next generation post-purchase solutions, that streamline the dispute process and improve
the customer experience. Available for all major card brands, Verifi solutions help merchants globally to prevent and resolve disputes by
sharing compelling evidence, data transparency and merchant-initiated or rules-based refunding. Verifi equips merchants, issuers and
acquirers to reduce financial loss, create operational efficiencies, and remove unnecessary fraud and first-party misuse disputes from
the payment ecosystem.
For more information, please visit: verifi.com
B2B International is a global, full-service market research firm, specializing in researching B2B markets. We help our clients achieve their
business goals by making smarter decisions driven by insights.
B2B International is part of a consortium of world-class B2B agencies who came together to form Merkle B2B. Being a Merkle B2B
company allows us to deliver the world’s first end-to-end, fully-integrated B2B solution. Our one promise? To architect the ultimate B2B
customer experiences.
For more information, please visit: b2binternational.com

Appendix 1 – Conversion and Acceptance Rates
By Payment Method
This section displays the average (mean and median) conversion and acceptance rates by payment method, as reported by merchants
in this year’s survey.
Card, direct debit and digital wallet payments have the highest average conversion rates, with means ranging from 25 to 40 percent,
globally. Conversion rates are significantly lower for bank / debit transfer and for digital wallet payments in Latin America
(see Figure 33).
Figure 33
Average conversion
North Mid-
rates by payment Overall Europe APAC LATAM SMB Enterprise
America Market
method
(median/mean)
Cards 30% 38% 35% 43% 35% 40% 25% 33% 25% 31% 34% 39% 30% 36% 30% 38%
Bank transfers / direct debit 20% 30% 25% 33% 30% 37% 20% 28% 20% 19% 20% 29% 25% 33% 20% 29%
Digital wallets / eWallets 20% 26% 20% 27% 20% 30% 28% 29% 15% 18% 20% 26% 20% 25% 20% 27%
Cash on delivery 15% 23% 10% 22% 18% 27% 20% 27% 10% 16% 10% 22% 15% 26% 16% 23%
mCommerce mobile payments 15% 22% 20% 24% 15% 23% 20% 24% 15% 18% 15% 20% 15% 24% 20% 23%
Buy Now Pay Later 15% 20% 15% 20% 15% 22% 10% 19% 10% 15% 12% 16% 10% 21% 15% 21%
Gift cards / vouchers 10% 19% 10% 21% 10% 17% 10% 21% 10% 13% 10% 16% 10% 20% 10% 20%
Cryptocurrency 10% 15% 10% 17% 10% 17% 13% 16% 7% 9% 10% 15% 10% 16% 10% 16%
Other local digital payments 11% 17% 12% 16% 10% 14% 10% 18% 20% 21% 10% 16% 10% 20% 15% 17%
(All means calculated with trimmed averages) Sig. Lower vs. Other Segments
When it comes to payment acceptance, the same three methods – cards, debit transfers, and digital wallets – also show the highest
average rates, with means ranging from 30 to 50 percent (see Figure 34).
Figure 34
Average acceptance
North Mid-
rates by payment Overall Europe APAC LATAM SMB Enterprise
America Market
method
(median/mean)
Cards 50% 55% 75% 62% 60% 58% 40% 46% 40% 46% 50% 56% 50% 53% 50% 56%
Bank transfers / direct debit 35% 47% 40% 50% 50% 55% 25% 42% 21% 34% 40% 48% 40% 51% 30% 44%
Digital wallets / eWallets 30% 44% 30% 46% 38% 50% 30% 41% 20% 32% 30% 44% 30% 47% 30% 42%
Cash on delivery 20% 38% 14% 34% 30% 46% 27% 41% 15% 29% 18% 38% 25% 36% 20% 38%
mCommerce mobile payments 25% 40% 30% 42% 33% 44% 25% 37% 20% 32% 25% 40% 25% 44% 27% 37%
Buy Now Pay Later 20% 36% 25% 35% 30% 42% 20% 32% 15% 29% 20% 34% 25% 38% 20% 35%
Gift cards / vouchers 20% 38% 20% 37% 20% 42% 20% 38% 10% 30% 11% 34% 20% 37% 20% 40%
Cryptocurrency 20% 28% 20% 31% 23% 36% 18% 21% 10% 18% 15% 31% 15% 27% 20% 26%
Other local digital payments 20% 35% 20% 27% 24% 41% 23% 31% 23% 36% 20% 36% 20% 39% 20% 32%
(All means calculated with trimmed averages)

Appendix 2 – questions asked
This section shows the questions asked to survey respondents to gather the data shown throughout this report.
Figure 1
• In which country are you located?
Figure 2
• Please estimate your organization’s annual eCommerce revenue.
Figure 3
• Which one of the following describes the primary source of your eCommerce revenue?
Figures 4, 5 & 6
• Which of the following types of payment methods does your organization currently accept?
• And which of these payment methods, if any, did your organization add over the past 12 months?
Figure 7
• In what ways, if any, does your organization encourage or guide customers to use your preferred types of payment method(s)?
• What is the ONE most important reason why you encourage customers to use your preferred payment method(s)?
Figure 8
• Which, if any, of the following third-party marketplaces does your organization currently use to sell to customers?
• Why does your organization utilize third-party marketplaces?
Figure 9
• How many payment gateway or processor connections does your organization currently support?
• How many merchant acquiring banks does your organization currently use?
• For what reasons does your organization have multiple acquiring relationships?
Figure 10
• Which, if any, of the following retail approaches are used by your organization?
• Which, if any, of the following customer experiences does your organization currently offer?
Figure 11
• Which, if any, of the following authorization-related approaches and techniques does your organization currently use?
• Does your organization use any third-party data in association with any of these?
Figure 12
• Which of the following payments management key performance indicators (KPIs) are extremely important to your organization?
Figure 13
• Please indicate the percent of your annual eCommerce revenue lost due to payment fraud globally, i.e., fraud rate by revenue. This
includes fraud chargebacks received, as well as credits or refunds issued directly to customers who claim not to have placed an
order as well as chargeback fees.
• Please indicate the percent of your annual eCommerce revenue lost due to payment fraud on orders from [INSERT COUNTRY], i.e.,
domestic orders. This includes fraud chargebacks received, as well as credits or refunds issued directly to customers who claim
not to have placed an order as well as chargeback fees. Your best estimate is fine.

• Please indicate the percent of accepted annual eCommerce orders that turned out to be fraudulent (i.e., fraud rate by order) from
[INSERT COUNTRY] i.e. domestic orders.
• Please indicate the percent of accepted annual eCommerce orders that turned out to be fraudulent (i.e., fraud rate by order) from
outside INSERT COUNTRY] i.e. international orders.
• Please indicate the percent of eCommerce orders for which you have received chargebacks due to fraud. Note: A chargeback is
defined as a transaction where the card issuing back disputes a previously authorized transaction.
• Please indicate your order rejection rate for domestic orders.
• Please indicate your order rejection rate for international orders.
Figure 14
• Please indicate the percent of your annual eCommerce revenue your organization spends to manage payment fraud — excluding
actual fraud losses.
Figure 15
• How do your organization’s future fraud strategy plans incorporate manual review?
Figure 16
• Please indicate the percentage of eCommerce orders you manually screen for fraud.
• Of the eCommerce orders manually reviewed by your organization, please indicate the percentage you decline (cancel) due to
suspicion of fraud.
Figure 17
• To what extent has your organization implemented changes necessary to comply with PSD2, in particular, strong customer
authentication (SCA)?
Figure 18
• And how do you expect PSD2, in particular, strong customer authentication (SCA), to impact your organization?
• With respect to SCA, how many of the following exemptions or out-of-scope flags are you planning on utilizing in the future?
Figure 19, 20 & 21

• Which of the following types of fraud attacks, if any, have you ever experienced at your organization?
Figure 22
• Which of the following types of fraud attacks, if any, have you ever experienced at your organization?
• Has your organization experienced an increase in first-party misuse / friendly fraud disputes since 2021?
• Approximately how much does it cost your organization to manage first-party misuse / friendly fraud disputes (for every
$100 in disputes)?
• What percentage of (all) fraudulent disputes do you believe are first-party misuse (i.e., friendly fraud or chargeback fraud)?
Figure 23
• For what reasons do you believe your organization has seen an increase in first-party misuse / friendly fraud disputes
since 2021?
• Which of the following reasons do you believe causes first-party misuse (i.e., friendly fraud or chargeback fraud) to occur at
your company?
Figure 24
• Which of these describe your organization’s current approach to combating First-Party Misuse (i.e., friendly fraud /
chargeback fraud)?
Figure 25
• Do you submit compelling evidence to respond to first-party misuse / friendly fraud disputes?
• Have you heard of major card brands’ updates to compelling evidence (related to first-party misuse / friendly fraud disputes)?

• Do you believe these updates will help solve or reduce the problem of first-party misuse / friendly fraud?
• Do you collect and store the necessary data elements on historical transactions to take advantage of these updates?
Figure 26
• Which of the following challenges related to eCommerce fraud management, if any, has your organization experienced in
the last 12 months?
Figure 27
• Thinking ahead to the next 12 months, which of the following, if any, are areas of improvement for your organization?
Figure 28
• Which one of the following would you say is the most important to your organization when evaluating fraud management
practices?
Figure 29
• Next is a series of fraud detection tools. Please indicate which tools your organization currently uses.
• Which tools, if any, does your organization have plans to start using in the future?
Figure 30 & 31
Figure 32
• Now, how effective is each of the following tools in detecting eCommerce payment fraud?
Figure 33
• What is your organization’s average conversion rate (i.e., percentage of visits from the checkout page that result in a completed
checkout) for each of the following payment methods that you currently accept?
Figure 34
• Please estimate your organization’s acceptance rate (meaning the percentage of initiated payments accepted by the payment
provider) for each of the following types of payment methods.



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2023 Global

Global Fraud and Payments Survey Report 2023 1

Global Fraud and Payments Survey Report 2023 2

09 Section 1: Payment Acceptance

13 Section 2: Payment Management

16 Section 3: Business Impact of Fraud

21 Section 4: Fraud Attacks & Challenges

27 Section 5: Fraud Prevention

32 About The Authors

33 Appendix 1 – Conversion and Acceptance Rates

34 Appendix 2 - Questions Asked In The Survey

Global Fraud and Payments Survey Report 2023 3

Global Fraud and Payments Survey Report 2023 4

Region Company size

Physical Goods Travel & Tourism

Global Fraud and Payments Survey Report 2023 5

1. Payment Acceptance – How are merchants

• Merchants are increasingly implementing buy-now-pay-later (or “BNPL”) payment

• Merchants continue to leverage multiple payment processors and acquiring banks to

2. Payment Management – How are merchants

• To keep up with fast-changing shopping habits and payment preferences, merchants

Global Fraud and Payments Survey Report 2023 6 6

• Merchants now employ an average of two to three different approaches or techniques

3. Business Impacts Of Fraud – What are the

This year, APAC and LATAM-based merchants also stood out

• Roughly 85% of merchants have started implementing Strong Customer

New questions added to this year’s survey show recurring transaction,

Global Fraud and Payments Survey Report 2023 7

• Over one-third of merchants experience first-party misuse or “friendly fraud,” with

5. Fraud Prevention – How are merchants

Global Fraud and Payments Survey Report 2023 8

Payment Methods Currently Accepted & Added In The Past 12 Months

(+9%) Avg. Number Currently Accepted = 4.6

Avg. Number Added In P12M = 2.2

Global Fraud and Payments Survey Report 2023 9

By Region (2023) By Ecommerce Revenue (2023) By MRC Status (2023)

= Sig. Higher = Sig. Lower

Figure 6: Differences In Payment Acceptance Among MRC Members vs. Non-Members

Share of Merchants Currently By MRC Status (2023)

Base 1,072 1,015 57

Bank transfers / direct debit 67% 68% 49%

= Sig. Higher = Sig. Lower

Global Fraud and Payments Survey Report 2023 10

2023 (n=1,072) 2023 (n=952)

Offer preferred payment methods prior to Faster availability of funds

Include surcharge / fee for non-preferred Preferred / exclusive partner

None of the above (we do not encourage MRC Members

Do Not Sell On Any

Reasons for Using Third-Party Marketplaces

60% SMB (29%)

Global Fraud and Payments Survey Report 2023 11

By Region (2023) By Ecommerce Revenue (2023) By MRC Status (2023)

Number Of Payment Gateway / Processor 4.1 3.9 3.5

For overall To improve or To improve or To gain access to To improve or

For overall To improve or To improve or To gain access to =To improve

Global Fraud and Payments Survey Report 2023 12

More Merchants Implementing Novel Retail Approaches And Customer Experiences

Usage of Retail Approaches

Buy in store, pickup in other store 28%

Global Fraud and Payments Survey Report 2023 13

Customer Experiences Offered

Grab & go 19%

Increasing Usage Of Machine Intelligence To Optimize Internal Payment Processes