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January 13, 2025 • Issue 25:01:01

Year in review 2024, Part 2 – Change

continues to define merchant services

a quarter and a third of retail sales, according to various
sources, and the fact that ecommerce is a card-not-present
environment, it's a safe bet that dollars lost to fraudsters
by American retailers exceeded $13.46 million this past
holiday season.

LNRS defines the "true cost" of fraud, in addition to
goods lost/stolen, as fines and fees, as well as customer
experiences. Scams drive a significant portion of fraud
losses, despite ongoing efforts by government agencies,
banking organizations and retail associations to educate
consumers to stay clear of fraudsters.

Buy now, pay later transactions accounted for 37 percent
By Patti Murphy of fraud losses, LNRS reported, but credit and debit cards
contribute most to fraud losses due to their widespread use
erchant acquiring has always been a lot to do and data breaches.
with payments. But not everything. Within
the context of payments, however, fraud has Data breach costs skyrocketing
M long been a serious concern to merchants and
their service providers. Data breach costs also are reaching new highs. IBM
reported that globally, the average cost of a data breach was
Here's a look back at how this all played out in 2024, $88 million in 2023, 10 percent higher than the year before.
starting with fraud trends uncovered during the year. This Lost business, and post-breach customer and third-party
seems appropriate, coming off one of the busiest year-end response needs drove the year-over-year spike in cost, the
shopping seasons in recent memory. company's security arm reported.
The persistent thorn in the side that is fraud "Businesses are caught in a continuous cycle of breaches,
containment and fallout response," said Kevin Skapinetz,
LexisNexis Risk Solutions reported in its recent True Cost vice president of strategy and product design at IBM
of Fraud Study that the true cost of fraud to merchants in Security. "This cycle now often includes investments
the United States and Canada is $3 for every $1 lost in a in strengthening security defenses and passing breach
fraud event. To put this into perspective, consider that the expenses on to consumers, making security the new cost of
National Retail Federation predicted that Americans would doing business."
spend nearly $1 trillion in November and December 2024
on holiday and related purchases.
Contributed articles inside by:
If we assume that 0.1346 percent (13.46 basis points) of Allen Kopelman .....................................................................................14
transaction dollars are fraudulent (which is the latest
estimate from the Federal Reserve), merchants lost $13.46 Ken Musante ..........................................................................................16
million to fraud during the holiday shopping season alone.
Casey Scheer ..........................................................................................26
It's important to note, however, that the Fed's data was Dwaine Thomas ....................................................................................28
based on 2016 reporting, long before ecommerce went
into hyperdrive. With ecommerce now driving between Anthony Walton ....................................................................................30

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