By Christian León Trueba*
E-commerce fraud is a persistent and evolving threat. As the value of online sales in retail continues to increase to reach a value of 658.3 billion pesos in Mexico during 2023 (AMVO) and 4.4 trillion dollars globally (Forrester), so does the pressure of fraud, which in simple words is the number of fraud attempts experienced by businesses, and which until July of this year had a continuous increase until reaching a growth of 42% YoY in Latin America (Signifyd).
Faced with the constant evolution of fraud attempts, it is evident that no entity, no matter how robust and prepared it may be, will be able to stop it alone. And as a consequence, organizations have emerged that seek to unite the efforts of the largest participants in global electronic commerce to mitigate the threats that hinder the industry.
An example is the Merchant Risk Council, a global, non-profit body that since 2000 has brought together payment and fraud prevention experts to fight fraud, and which recently began expanding its operations in Latin America.
What these organizations seek is, first of all, to establish communication and learning channels in which companies and professionals share knowledge and talk about best practices in the industry, allowing others to take preventive measures to protect their businesses.
The collective intelligence of those of us dedicated to ecommerce significantly improves the industry’s ability to respond to new risks and understand the size of the challenge we face. After all, we are talking about million-dollar losses: approximately 3% of total ecommerce profits are lost to ecommerce fraud, while 6% of purchase orders are rejected each year due to suspected fraud (MRC).
Another way collective efforts encourage fraud mitigation is when payment solution or anti-fraud tool providers showcase their latest technologies in front of industry members. The objective of these exercises is to receive comments or feedback regarding day-to-day operations.
In my experience, this approach results in developing and updating advanced fraud detection and prevention tools, creating better machine learning algorithms for data analysis, and detecting suspicious patterns. In addition, a greater understanding of public policies and interests of different regions of the world is built, ensuring that the industry’s voice is heard and that the regulatory environment supports effective fraud prevention.
The battle against e-commerce fraud is ongoing, but it is a battle that can be won. Through collaborative effort, the industry has a powerful ally to create a formidable defense, ensuring that e-commerce remains a secure and trusted platform for consumers around the world. By working together, we can build a resilient e-commerce ecosystem, where fraudsters find no refuge and legitimate commerce thrives.
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*Christian León Trueba is Director for Signifyd in Latin America
The opinions expressed are solely the responsibility of their authors and are completely independent of the position and editorial line of Forbes Mexico.
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