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E-Commerce Fraud Remains High as ACI Worldwide Shows Consumer Spending Remains High

A busy holiday shopping season is projected, with e-commerce transactions expected to rise 15 per cent from October through December 2022. These findings are according to data analysis from millions of transactions conducted by ACI Worldwide, a global provider of real-time digital payments software.

ACI Worldwide’s e-commerce research shows that consumer optimism is holding strong, despite inflationary pressures and limited inventory, and beat last year’s predictions for the same period (14 per cent).

“Consumers are quietly optimistic with their holiday season spending, but will be more price-conscious this year as inflation and economic uncertainty loom,” said   head of merchant, ACI Worldwide. “We’re seeing shoppers spend more on experiences rather than physical items as pent-up demand for travel, events and concerts remains strong post covid.”

ACI’s e-commerce intelligence reports that the main sector driving growth during the 2022 holiday season will be gaming (34 per cent). Travel and ticketing (29 per cent) takes second place, telco (18 per cent) third, home improvement (13 per cent) fourth and fashion retail (seven per cent) fifth.

Mobile payments slightly increase and preference for digital wallets grows

Mobile payments are projected to increase five per cent during the 2022 holiday season, compared to the same period in 2021, while the average ticket value (ATV) is expected to grow by 45 per cent ($123), according to ACI e-commerce intelligence. Moreover, digital wallets are anticipated to be among the popular payment methods, with a projected 11 per cent increase in transactions.

The ATV for buy now, pay later (BNPL) is expected to grow 10 per cent. As inventory shortages persist, ACI forecasts a revival of the gift card industry with an expected two times increase in ATV. Furthermore, spending within the gaming sector is predicted to rise 34 per cent in transaction volume.

“Consumers are savvier on payment methods like BNPL as they look to delay spending by breaking up their purchases into smaller installments,” Singh continued. “In addition, consumers are showing a strong preference for digital wallets as a payment method as they shop more online and less in stores this holiday season.

“Merchants may want to consider improving the BNPL checkout experience for people with higher credit-approval rates. In addition, ensuring a smooth experience with digital wallet acceptance and strong fraud prevention in place will be beneficial.”

As merchants instil shipment cut off dates for last-minute shoppers, the volume of transactions is expected to increase 24 per cent for shipment cut off: priority, 15 per cent for shipment cut off: ground and 10 per cent for shipment cutoff: express.

However, buy online, pick up in store (BOPIS) is forecasted to go up nine per cent during the 2022 holiday season compared to 2021, as consumers consider this alternative to paying for shipping. “With inflation driving shipment costs up, we can expect to see shoppers turning to other delivery channels like BOPIS to curb their expenses,” Singh concluded.

Fraudsters targeting high-value items

According to ACI data, the volume of friendly fraud increased 22 per cent. The data also found the average transaction value grew 39 per cent from January through September 2022, when compared to the same period in 2021. The data also shows that account takeover fraud doubled in the same time frame versus 2021.

“We’re seeing a significant increase in the average ticket value of friendly fraud. This indicates that fraudsters are targeting high-value items like electronics and travel,” said Erika Dietrich, head of fraud management and payments analytics, ACI Worldwide. “We expect this trend to continue into the 2022 holiday season and encourage merchants and shoppers to be vigilant.

“Orchestration between merchants’ fraud prevention and payment strategies will be crucial to protect all entry points and adapt to changing fraud behaviors and payment channels at the same time.”

Author

  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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