Global eCommerce Transactions Expected To Surge by 14% During 2023 Holiday Season, Friendly Fraud Looms as the Biggest Spoiler
- A 14% increase in global eCommerce transactions is anticipated during the holiday season, with the gaming sector leading the expected transaction growth
- Buy now, pay later (BNPL) transactions are expected to triple as consumers look to stretch their dollars under inflationary pressures
- Fraud attempts are expected to grow to 3% of all transactions, with friendly fraud making up 20% of all fraud threats
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(Graphic: Business Wire)
"The anticipated rise of friendly fraud is poised to be the top threat this holiday season," said
Buy now, pay later (BNPL) is favored by consumers and fraudsters
According to ACI data, BNPL transaction volumes doubled in Q3 2023 versus 2022, with a 130% increase in transaction value for the same time frame due to inflated prices. Consumers are leaning towards BNPL as a flexible payments option to purchase without immediate financial strain, especially for high-value products above
Keep tabs on new customer accounts
Merchants should exercise caution with new customer accounts — created in the last 30 days — as they are particularly vulnerable to fraudulent activity. According to ACI data from January to
"Amid economic uncertainties, consumers are expected to actively pursue discounted products and embrace flexible payment methods to alleviate financial strains. With merchants eyeing revenue growth and budget-conscious buyers scouting for deals, this holiday season presents a promising opportunity for both sides, contingent on effective safeguards against potential threats," said
Key predictions at a glance
eCommerce purchasing trends (Q4 2023 vs. 2022):
Cyber Monday takes the lead in transaction volume growth predictions by key dates at 19%, followed by the Sunday prior to Cyber Monday at 9%, the Saturday after Black Friday at 6%, Black Friday at 5% and
- Gaming emerges as the leading sector in the predicted transaction volume growth at 180%, followed by telco at 12%, retail at 9% and travel at 3%.
Payment trends (Q4 2023 vs. 2022):
- The key payment method predictions for percentage growth highlight the remarkable surge of BNPL, which is expected to triple, followed by buy online and pick up in-store (BOPIS) at 16%, eWallet at 15%, credit/debit card at 4% and mobile payment at 3%.
- Predictions for Q4 2023 reveal friendly fraud as the leading threat, with an anticipated attempt percentage of 20%, followed by 3% for account takeover and 1% for promotional abuse.
Consumers today have myriad ways to make payments, and macroeconomic forces such as inflation have significantly influenced and reshaped consumer payment habits. The emergence of alternative payment methods also facilitated fraud and policy abuse proliferation. Technologically adept merchants can stay ahead of this curve by embracing a cohesive fraud strategy that combines consortium intelligence, profiling, AI machine learning and rules.
*Holiday season/Q4 refers to the period of October through December.