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Seller-Related Identity Fraud Is the Biggest Threat to E-Commerce Providers and Platforms this Holiday Season

Socure’s Consumer Research Uncovers Seller Fraud Ranks Among Top Three Concerns for Consumers and Blocks Brand Loyalty

Socure, the leading provider of digital identity verification and fraud solutions, unveiled its Consumer Online Shopping Fraud Survey 2021: Holiday Edition. The survey results provide a stark warning for e-commerce platforms and marketplaces that consumers have zero tolerance for seller-related identity fraud and won’t return to a platform if that occurs.

“Existing e-commerce fraud solutions are not designed to solve the seller fraud problem or prevent counterfeit items from being sold because they are transaction-based”

In fact, 51% of consumers are reluctant to do business with smaller merchants due to the perceived risk of fraud. And what’s more, a whopping 72% of consumers said that if a purchased item was not received due to seller fraud, they would never do business with that platform again. Yet only 27% of consumers said they would abandon the platform if an item was not delivered on time, which suggests that seller-related fraud is a deal-breaker when it comes to keeping customers long-term.

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The survey also revealed the top three concerns consumers have regarding shopping online, which are not receiving goods (31%), goods not being delivered on time (28%), and seller fraud (24%). These findings indicate consumers are dubious about the safety of shopping online this season, and e-commerce platforms need to be prepared.

PREDICTIONS-SERIES-2022

As the 2021 holiday online shopping blitz is now well underway, it’s critical that e-commerce merchants prepare for anticipated increases in fraud losses and the long-term effects on their brand. According to Socure’s survey, the uptick in e-commerce volume will be accompanied by higher fraud risk, with 85% of consumers anticipating more or the same amount of fraud this year as compared to 2020. The research also revealed that the expected increases in fraud risk are due to technology risks within e-commerce platforms which ranked as the second biggest driver (21% of consumers), right after increases in online transactions (31%).

The time is now to put controls in place to better assess the safety of allowing buyers and sellers to transact while protecting brand reputation. Looking across the landscape, many platforms assess only aspects of an identity—a phone number, an address, or an email—that, in silos, fail to gauge fraud at scale.

Socure has a tailored e-commerce solution that provides the most comprehensive approach to identity verification and fraud to ensure superior marketplace health. This is done on the back of the company’s industry-leading fraud detection suite, looking at 17,000 different risk signals on top of over half a billion known identity decision outcomes, to determine the risk of a consumer’s identity, as well as assessing the risk of the device, email, address, phone number, and more. Socure achieves fraud capture rates of up to 90% in the riskiest 3% of users for leading e-commerce and marketplace platforms.

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“Existing e-commerce fraud solutions are not designed to solve the seller fraud problem or prevent counterfeit items from being sold because they are transaction-based,” said founder and CEO of Socure, Johnny Ayers. “Socure, on the other hand, is able to not only verify if the person conducting business is who they say they are, but also verify if they are a known fraudster and it’s safe for them to enter into a business’s ecosystem. Having the ability to do both is critical to maximize marketplace health and protect consumers from fraudulent behavior online.”

Socure ID+ has become the preferred identity verification and fraud platform for enterprises of all sizes and is trusted by four of the five largest banks, 12 of the top 15 largest credit card issuers, top Buy Now, Pay Later (BNPL) providers, top investment management firms, top crypto exchanges, and the majority of top fintechs. Socure has emerged as the clear market leader and highest valued ($4.5B) private company in the identity verification space.

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[To share your insights with us, please write to sghosh@martechseries.com]

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