Adyen, the global financial technology platform, released a preview of its new this Tuesday Adyen Index: Retail Report 2024a new study that reveals the billions of euros the global retail sector loses annually to fraudulent activity.
In collaboration with the Center for Economics and Research (Cebr)Adyen figured this out The retail sector lost $429 billion worldwide to fraud in 2023. On average, Spanish companies lost €1.3 million due to fraudulent attacks. Overall, more than three in ten Spanish companies (35%) have been victims of fraudulent activity, cyberattacks or data breaches in the last 12 months, representing a 30% increase compared to 2022 figures.
This new study shows that companies expecting to grow their revenue by 100% or more in 2024 tThey also suffered losses from fraudulent attacks in the last 12 months (4,870 million euros).. They warn from Adyen that rapid growth must be addressed with appropriate technologies to protect the company and customers.
Since then, these fraudulent activities have also affected the buyers’ economy More than a third (35%) of global consumers have fallen victim to payment fraud last year, compared to 23% in 2022. Payment fraud is the theft of credit/debit card numbers and checking account information and the use of this information to make unauthorized payments by a fraudster. An average of 670 euros was lost by Spaniards who fell victim to payment fraud in 2023, an increase of 234% since the last survey.
However, despite the significant increase in fraudulent activity, only two thirds of companies in our country (65%) reported having effective fraud prevention systems in place – an increase of just 5% since last year.
Effects of fraud on consumer behavior
The risk of fraud has influenced consumer purchasing behavior, both in stores and online. Actually, 21% of Spanish consumers feel less confident when purchasing today than 10 years ago due to the increased risk of payment fraud.
As a result, 28% of consumers actively choose to shop in stores with higher security measuresAnd when shopping online, 21% of Spanish consumers like stores require them to verify their identity in at least two different ways before purchasing, even though this may cause them inconvenience.
Business response
Companies are actively examining how they can respond to the growing threat of fraud to protect themselves and their customers. 41% have considered changing payment service providers On the other hand, it offers better defenses against fraud.
In addition, in Spain, one in two respondents (50%) have started thinking about how their company can comply with the Payment Services Directive 3 (PSD3), a European Union directive that sets stricter rules to protect the rights of consumers and personal data in the financial sector .
«Fraud is a pervasive challenge for retailers, and today’s results show how it can have a significant impact on profits“, It says Roelant Prins, CCO, Adyen. «Criminals are using more sophisticated methods to attack companies, including the use of AI. Therefore, it is important to invest in appropriate defense mechanisms to protect the company and customers.“, Add.
«There is no one-size-fits-all solution to fraud prevention as a strategy must be tailored based on the business model and platforms used to sell. With technologies such as machine learning tools, retailers should be able to recognize individual customers and detect fraudulent activity in their sales channels.«he emphasizes.
Highlights from Roelant Prins: «Machine learning can help analyze global data sets to stay abreast of new fraudulent activity and ensure business protection in real time. We use advanced technology combined with customizable rules to protect retailers and their customers by blocking fraud, preventing disputes and staying ahead of the latest trends.«.