Online fraud will cost merchants around £1.6bn this year, according to a survey by CyberSource, a
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The cost, which is 8% higher than last year, emerges from a survey that also shows that for companies with annual online revenues of between £3 million and £15 million, online fraud losses are likely to affect nearly 2% of their revenue.
According to the survey, most merchants continue to rely on two basic means of fighting fraud: address verification systems, which compare the address on file at the card issuer to the billing address provided by the cardholder, and checks of the card verification number - the additional digits printed on a credit card.
What’s likely to hit merchants more than the fraud is the loss of confidence by online buyers. The recent rash of identity fraud and blended phishing attacks, coupled with more spyware worries, is enough to make even hardened online shoppers think twice before using a credit card online. It’s not just the net virgins that need convincing – it’s the power users too.