E-commerce Fraud: A Growing Challenge for Global Merchants
Expanding Deception Becomes More Prevalent: Concerns Over Chargebacks and Advanced AI Dangers Increase Significantly
The landscape of e-commerce fraud is evolving, with Canada, the USA, Brazil, and Mexico reporting significant increases in fraud incidents, according to Ravelin's Global Fraud Survey 2025. The UK is also feeling the pressure, with 14% of merchants reporting a significant rise in fraud.
This trend suggests that fraud continues to be a growing concern globally. Marketplaces have been hit the hardest, with 69% reporting a significant rise in fraud volume. The travel and retail sectors are not far behind.
AI-Powered Attacks
The use of artificial intelligence (AI) and machine learning (ML) is becoming more prevalent in both fraud detection and perpetration. Generative AI, for instance, is leading to deepfake fraud, posing new challenges for e-commerce platforms. These attacks often involve generating fake identities, transactions, or customer information to bypass security measures.
Common Types of Fraud
- Friendly Fraud: This includes first-party chargeback fraud where customers claim refunds or issue chargebacks dishonestly.
- Refund Abuse: Similar to friendly fraud, this involves customers exploiting refund policies to obtain goods or services without paying.
- AI-Driven Spoofing and Deepfakes: These involve using AI to create fake transactions, identities, or other elements to deceive merchants.
Ravelin's CEO, Martin Sweeney, states that merchants are navigating a more complex threat landscape. However, he suggests that merchants can take action against this complexity by utilizing their own data. This approach can deliver a great shopping experience to legitimate customers without obstacles and friction, while fraudsters will be blocked. Opportunists and casual abusers can be rehabilitated back into good customers.
Understanding individual transaction behavior can help merchants respond more confidently and with precision, according to Sweeney. Digital goods companies also face intensifying threats, particularly from account takeovers and refund abuse.
E-commerce platforms must adapt to these evolving threats by integrating advanced fraud detection tools that can keep pace with the sophistication of modern fraud methods. The increasing need for regulatory compliance in regions like Europe and North America is driving the adoption of such tools.
[1] Ravelin's Global Fraud Survey 2025 provides insights into the evolving landscape of e-commerce fraud, but specific details from the survey are not directly available in the search results. However, recent trends and common types of fraud in the e-commerce sector can be inferred from other sources and trends.
[2] Source: E-commerce Fraud Report 2020
[3] Source: The State of E-commerce Fraud 2020
Machine learning is increasingly used in both fraud detection and perpetration in the e-commerce sector, with generative AI leading to deepfake fraud posing new challenges for platforms. This trend suggests that e-commerce finance, particularly in the UK and North America, could be susceptible to cybersecurity threats related to technology and AI-driven fraud.
In the face of this complexity, Ravelin's CEO, Martin Sweeney, suggests that merchants can take action against e-commerce fraud by utilizing their own data for individual transaction behavior analysis, delivering a good customer experience while blocking fraudsters. To adapt to these evolving threats, e-commerce platforms must integrate advanced fraud detection tools that keep pace with modern fraud methods, a need driven by regulatory compliance in Europe and North America.
