A study from Juniper Research suggests that online fraudulent transactions will hit $25.6 billion (£17.6 billion) in 2020, up from $10.7 billion (£7.4 billion) last year.

This means that by the end of the decade, $4 in every $1,000 of online payments will be fraudulent. E-retail is likely to account for 65 per cent of fraud, or $16.6 billion (£11.4 billion), by that date, with weak areas including buy online, pay in store and electronic gift cards. The sector is followed by banking (27 per cent) and airline ticketing (6 per cent).

The study, ‘Online Payment Fraud: Key Vertical Strategies & Management 2016-2020’ found that the implementation of CHIP and PIN services at POS (Point of Sale) locations in the US is likely to be a key factor driving activity in the online fraud space. It argued that the greater security afforded by CHIP and PIN would persuade fraudsters to switch their attention from the in-store environment to the CNP (Card Not Present) space. Continuing migration online and to m-commerce (reaching over $1.7 trillion in 2015) will provide further incentives for fraudsters to focus on these channels, argues the report.

Meanwhile, the research claimed that although banks are able to counter online banking fraud by deploying new technologies such as 3D-Secure and device fingerprinting , these measures often only provide temporary respite as fraudsters quickly find new ways to defraud.

Similarly, while extensive efforts by the airline industry to deploy sophisticated Fraud Detection and Prevention (FDP) systems has reduced fraud significantly for some major airlines, this industry has also seen fraudsters shift their focus to other perceived weak spots in the system.

A complimentary whitepaper, ’Managing the Risk of Fraud’, is available to download from the Juniper website together with further details of the full research and the attendant Interactive Forecast Excel (IFxl).