Fraud management now eats more than one fifth of ecommerce merchants' operational costs

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By: Wise Marketer Staff |

Posted on August 27, 2013

PORTLAND, Ore.Sept. 21, 2017 /PRNewswire/ -- Ecommerce merchants are investing record sums to combat fraud, according to "Exploring the Financial Impact of Fraud in a Digital World," a new report published today by Vesta Corporation and Javelin Strategy & ResearchFor the third consecutive year, the organizations surveyed hundreds of ecommerce merchants to assess their fraud fighting costs and challenges.
Fraud now consumes 8 percent of the average ecommerce merchant's revenue stream and 9.7 percent of revenue among merchants who sell only digital goods, like eBooks, eTickets and other instant download items. In fact, the average ecommerce merchant now devotes 21 percent of its operational costs to fraud management.

"Merchants' fraud costs continue to rise year over year," said Javelin Research Director Al Pascual. "While some merchants have experimented with new fraud fighting tools and tactics, on the whole, they haven't been able to keep pace with dynamic fraudulent threats."

Compared to 2016 datachargeback losses—which occur when merchants end up footing the bill for legitimate consumer or fraudster purchases—increased by 60 percent among digital goods merchants and 75 percent among those merchants selling strictly physical goods. False positives—which occur when merchants mistakenly decline legitimate transactions—grew by 25 percent among digital goods merchants and 27 percent among physical goods merchants.

"The writing is on the wall," explained Vesta Chief Marketing Officer Tom Byrnes. "If merchants don't modernize their fraud protocols, they won't be focused on growth or innovation; they'll be struggling to stay in business."

To download a complimentary copy of the report, please visit

About Vesta Corporation

Vesta Corporation is the only global provider of integrated fraud and payment solutions for enterprise partners in the ecommerce, telecom, digital goods, media and financial industries. The company's guaranteed ecommerce payment solutions and innovative, patented fraud technology are proven to increase conversion and acceptance while eliminating fraudulent transactions and merchant liability.

Survey Methodology
Vesta Corporation retained Javelin Strategy & Research to conduct an independent online study in June 2017 of 497 e-commerce merchants earning $1 million or more annually, including 142 merchants selling only digital goods, 155 merchants selling only physical goods, and 200 hybrid merchants, selling both types of goods.

Media Contact:
Ian Toner
Communications Strategy Group, on behalf of Vesta Corporation

SOURCE Vesta Corporation