Merchant Risk Council Announces annual e-commerce fraud survey results

The Merchant Risk Council (MRC), a merchant-led trade association focused on electronic commerce risk and payments globally, today announced the results of its Annual Merchant Fraud Survey. This year’s survey was sponsored by CyberSource Corporation as part of its broader annual survey of online fraud. The results of this survey show MRC Platinum members setting the pace for e-Commerce merchants in both the control of online fraud and the protection of legitimate customer orders. MRC Platinum members are 150 of the largest online retailers in the world. 

This year’s survey shows that MRC Platinum members are utilizing the highest number of fraud detection tools, have the lowest manual order review rates, and lead all merchants in reviewer productivity.  

Key Survey Findings:
•    MRC Platinum members reported an average of just 1.1% of their total revenue lost to online fraud, compared to 1.4% for the overall sample, and 1.3% for other large non-member merchants with greater than $25 million in online sales
•    MRC Platinum members rejected 2.4% of domestic orders on suspicion of fraud compared to 2.9% for the overall sample, and 2.6% for other large non-member merchants
•    MRC Platinum members rejected just 6% of international orders compared to 11% for the overall sample, and 12% for other large non-member merchants
•    MRC Platinum members reported a fraudulent international order rate of just 3.2%, compared to 4.0% for the overall sample and 3.4% for other large non-member merchants
•    MRC Platinum members had a 70% higher review order productivity level compared to other large non-member merchants, and were more than twice as productive as the overall sample

“This survey shows that even though MRC members are allowing a much greater rate of online orders to be processed, they are actually experiencing a lower rate of overall fraud for both domestic and overseas orders,” said Tom Sullivan, Chairman of the MRC, and Sr. Director of Global Payments & Risk for Expedia, Inc. “As merchants continue to look for ways to maximize revenues during tough economic times, accepting more valid international orders can be a great source of growth.”

The survey also revealed that MRC Platinum members use an average of 7.8 automated fraud screening detection tools. This compares to just 4.7 tools utilized by the overall sample and 5 tools used by other large non-member merchants.

“Today’s online criminals are getting more sophisticated and relentless in searching for merchant vulnerabilities,” said MRC Executive Director Tom Donlea. “The MRC allows a wide range of e-Commerce and multi-channel retailers to combine forces and strengthen their defenses. These survey results validate our collaborative efforts in both fighting fraud and increasing merchant profitability.”

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Full survey results will be presented by CyberSource as part of the Merchant Risk Council’s 7th Annual e-Commerce Payments and Risk Conference March 10–12, 2009 at the Wynn Las Vegas. The conference will be uniting over 500 representatives from the world’s top Internet merchants, credit card companies, risk management providers, law enforcement agencies and various consultants and educators – all with the mission of making e-Commerce safer and more efficient for consumers.  

Conference keynote speakers include: 
•    Tom Ridge, the first US Secretary of Homeland Security, addressing the growing cyber security issues that affect both US security and the global economy.
•    Terry Jones, Travelocity.com founder, focusing on the business of innovation.
•    Chris Hansen, Dateline NBC correspondent, sharing his findings on the growing cybercrime community.

Source: The Merchant Risk Council