PaymentsNews reports that according to a survey, eCommerce fraud is down for 2009. The survey was conducted by Cybersource and reports that:

“merchants in 2009 were fighting back against fraud, and seeing considerable evidence of success. U.S. and Canadian merchants expect to lose about $3.3 billion to eCommerce fraud this year, down from $4 billion last year. This is the first drop in estimated revenues lost since 2003. The percentage of revenue merchants predict they will lose in 2009, on average, is 1.2%, the lowest estimate in the 11-year history of the survey.”

Why the good news? Well, it seems that more widely accepted usage of automated decision tools to sort orders increased by 16%… from 56% in 2008 to 67%  in 2009.  An example of this is called “device fingerprinting,” when the source of orders is identified by a computer’s operating characteristics, also called its “fingerprint.” The use of device fingerprinting tripled in use, especially among merchants with more than $25 million in sales online. Another reason for the decrease has to do with awareness. About 33% of survey participants said they had changed their procedures in response to fraud, and about 68% now track the status of orders they manually review to better understand fraud management. This is in comparison to 54% the year before.

Merchants with eCommerce revenues of $5-$25 million were hit hardest in 2009, with about 1.3% of accepted orders resulting in loss due to fraud. Half of survey respondents reported that this year fraudulent orders appeared more like valid orders than the past year, meaning fraudsters are adapting to the changing environment.

Another increasingly positive figure is the growth in international sales. Though many merchants are wary of increased fraud when selling outside the US and Canada, the numbers of merchants going international has also increased to 54% from 51% the year before. The good news is that fraud on international order decreased a whopping 50% this year and order rejection rates decreased by 30%.

In terms of improving in the year to come, 60% of merchants with eCommerces sales bigger than $5 million mentioned adding automated detection and sorting capabilities on their systems as a top priority. Other priorities incluce improving process analytics (20%) and streamlining tasks and workflow around manual review (16%).

For more information on the survey results and method, please click here.

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