trending
Around the world we’ve experienced rapidly changing dynamics over the last few years. There’s been large-scale transformation to the workforce and global supply chains, along with the emergence of new consumer attitudes and shopping behaviours.
During COVID-19, e-commerce experienced a huge growth spurt as people turned to online shopping for everything from groceries and household goods to clothing.
Online grocery and a range of delivery services continue to be popular, with online grocery spend remaining 70% above pre-pandemic levels, compared to 25% for in-person grocery.
As consumers increasingly adopt more online shopping and digital experiences, the rise in Card-not- Present (CNP) transactions opens the door for more disputes and an increase in chargeback volume.
As these new consumer preferences and habits gain traction, it’s shifting traditional card-present transactions to CNP ones — propelling CNP volume to new heights.
Many businesses traditionally relying on card-present transactions now rely heavily on CNP ones for the first time.
Along with the switch to CNP is the transfer of fraudulent purchase liability to merchants from card issuers.
While the growth of many of these new shopping habits and payment methods may no longer be poised for a sharp upward trajectory, they remain much higher than their pre-pandemic levels, and e-commerce is here to stay.
This indicates people are settling into a new normal — a digital one.
So how do all these market dynamics translate to the current and future state of chargebacks?
A new report looks at chargeback trends around the world, along with the growth of e-commerce — a key factor influencing chargeback volumes and CNP fraud.
Even with some regions mandating Strong Customer Authentication (SCA), what’s clear is that chargebacks aren’t going away in the near term.
If you’re not currently taking a multi-layered approach to help reduce or prevent them, the time to do so is now.
Key highlights from the report:
Global chargeback volume forecast to reach 337 million: By 2026, it’s estimated that global chargeback transaction volumes will reach 337 million, a 42% increase
from 2023 levels.
Worldwide retail e-commerce total sales set to grow to $7.3 trillion: Worldwide e-commerce levels experienced a huge 25% upward spike in 2020. Retail e-commerce total sales are expected to reach $7.3 trillion by 2025. As more payment transactions happen online and digitally, the threat of an increasing number of consumer disputes and fraudsters grows.
CNP fraud losses will soar to $28.1 billion: Global CNP fraud losses will reach a value of over $28.1 billion by 2026. This represents a 40% increase from $20 billion in 2023.
SCA tools reduce digital payment fraud: Even though it’s proven to help reduce fraud, US merchants have been slow to adopt 3D Secure (3DS) since they want to avoid lost sales due to any potential friction with customer interactions. The SCA requirement has dented CNP fraud in Europe and helped to stabilise it.
Download the 2023 Chargeback Outlook Report
Comments