Ecommerce Fraud Prevention Software Market Size, Share, Growth, and Industry Analysis, By Type (Cloud-Based and On-Premise), By Application (SMES and Large Enterprise), Regional Insights, and Forecast To 2031

Updated On: 22 April 2024

Ecommerce Fraud Prevention Software Market REPORT OVERVIEW

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The global ecommerce fraud prevention software market size is expected to be USD 2567 million in 2021 and the market is projected to touch USD 10685.56 million by 2031, exhibiting a Compound annual growth rate (CAGR) of 15.2% during the forecast (2024-2031). In the market study, our analysts have considered ecommerce fraud prevention software players such as Visa, Riskified, RSA Security, Ethoca (Mastercard), Signifyd, Stripe, Forter, Sift, TransUnion, SEON, Shield, Adjust (AppLovin), Kount (Equifax), PayPal, ACI Worldwide, Razorpay, Bolt, DataDome, Subuno and NoFraud.

The COVID-19 pandemic has been unprecedented and staggering, with experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

Ecommerce fraud prevention software for detecting, preventing, and mitigating fraudulent behaviors that take place during online transactions is referred to as "ecommerce fraud prevention software." These software programs use a variety of strategies, including as sophisticated data analysis, machine learning, and algorithms for pattern identification, to spot potentially fraudulent transactions and shield businesses from losses. The program continuously scans internet transactions in real-time, looking for any suspicious trends or irregularities by examining a variety of data points. In order to identify potentially fraudulent activity, the software analyses customer information, transaction specifics, and historical patterns. Based on variables such as IP address, geolocation, purchasing patterns, and transaction velocity, these algorithms can identify suspicious transactions. Device fingerprinting techniques may be used by e-commerce fraud prevention software to track and identify specific devices.

In order to identify any irregularities, the software analyses client behavior and compares it to established trends. A consumer who abruptly places an unusually big order or makes a transaction from an odd location, for instance, can raise questions. Machine learning techniques are widely used in fraud prevention software to enhance fraud detection capabilities over time. Over time, these models can adjust to new fraud patterns and strategies by learning from prior data. The program frequently has options for manually reviewing transactions that have been reported. Informed conclusions can then be made by fraud analysts after additional investigation of suspected cases.

COVID-19 Impact: Increased Online Transactions to Boost Market Growth

Lockdowns, social isolation policies, and limitations on physical retail have all contributed to an increase in online purchasing. Due to the rising number of online transactions, fraudsters now have more opportunity to take advantage of holes in ecommerce systems. Changes in fraud patterns and methods have been brought on by the pandemic. Fraudsters have modified their tactics to profit from consumer behavior changes and uncertainty brought on by the pandemic. Scams involving bogus COVID-19 items, phishing attempts that prey on pandemic fears, and false requests for refunds or chargebacks, for instance, have all increased. Account takeover (ATO) fraud has increased as a result of the pandemic. More individuals are turning to online platforms for their shopping needs; therefore, thieves try to access user accounts without authorization to perform fraudulent transactions.

LATEST TRENDS

"Artificial Intelligence (AI) and Machine Learning (ML) to Augment Market Growth"

The use of AI and ML in preventing e-commerce fraud is becoming more and more important. Software can now learn from enormous volumes of data, recognise patterns, and spot anomalies in real time thanks to these technologies. Over time, ML systems can learn and strengthen their capacity for fraud detection, increasing accuracy and lowering false positives. A developing trend in preventing fraud is behavioural biometrics. To recognise and authenticate users, it entails analysing distinctive user behaviour patterns, including typing speed, mouse motions, touchscreen gestures, and other behavioural traits. By confirming the user's identification based on their behavioural characteristics, this method adds an extra degree of protection.

Ecommerce Fraud Prevention Software Market SEGMENTATION

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• By Type

Based on type market is classified as cloud-based and on-premise.

• By Application

Based on application market is classified as SMES and large enterprise.

DRIVING FACTORS

"Rising Sophistication of Fraud Techniques to Provide Impetus to the Market"

Online transactions have significantly increased thanks to ecommerce's ongoing expansion. The risk of fraudulent activity increases as more companies and customers conduct business online. This issue is addressed by ecommerce fraud prevention software, which offers efficient ways to identify and stop fraud, ensuring the safety of online transactions. Fraudsters are continually developing new strategies and methods to take advantage of weaknesses in e-commerce platforms. They use cutting-edge techniques like identity theft, account takeover, and novel types of payment fraud. In order to stay up with these changing fraud strategies and safeguard organisations from financial losses, ecommerce fraud protection software is essential. For e-commerce companies, fraudulent activity can lead to huge financial losses. Financial risks might also be associated with chargebacks, which happen when customers contest unauthorised transactions.

"Collaboration and Information Sharing to Propel Market Growth"

The capabilities of ecommerce fraud prevention software have been significantly improved by the quick improvements in technology, including artificial intelligence, machine learning, and big data analytics. In order to keep up with the shifting nature of fraud, these technologies offer more precise and effective fraud detection, real-time monitoring, and adaptive risk assessment. Businesses are able to communicate and exchange information about fraud within their industry thanks to fraud prevention software. Businesses may collaboratively fight fraud more effectively, spot emerging dangers, and take preventative action by sharing insights, data, and fraud tendencies. Cost reductions can result from ecommerce fraud protection software implementation in a number of different ways. It lessens the need for additional resources devoted to fraud detection and prevention, reduces the amount of money lost to fraud, and eliminates the need for manual examination of genuine transactions.

RESTRAINING FACTORS

"Complexity and Integration Challenges to Impede Market Expansion"

Integrating fraud prevention software into existing ecommerce systems and workflows can be complex and time-consuming. It may require technical expertise and resources to ensure seamless integration and compatibility with existing systems, including payment gateways, customer databases, and order management platforms. False Positives and Customer Friction: Ecommerce fraud prevention software relies on sophisticated algorithms to identify potentially fraudulent transactions. However, these algorithms may sometimes generate false positives, flagging legitimate transactions as fraudulent. False positives can lead to customer dissatisfaction, order delays, and additional manual review processes, potentially impacting the overall customer experience and increasing operational costs.

Ecommerce Fraud Prevention Software Market REGIONAL INSIGHTS

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"North America to Dominate the Market Due to the Enormous Volume of Online Transactions"

The ecommerce market in North America, which includes the United States and Canada, is established and highly developed. Due to the enormous volume of online transactions and the existence of big e-commerce operators, the region has witnessed a significant adoption of e-commerce fraud prevention software. Adoption is influenced by a number of factors, including the requirement to adhere to industry regulations like PCI DSS and the importance placed on consumer confidence and data security. It has a thriving online marketplace. The GDPR emphasises the importance of data privacy and protection in the region. The adoption of fraud prevention software, which guarantees secure transactions and safeguards consumer data, is driven by this emphasis on privacy. Another crucial element in the area is corporate cooperation and information sharing.

KEY INDUSTRY PLAYERS

"Key Players Focus on Partnerships to Gain a Competitive Advantage"

Prominent ecommerce fraud prevention software market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

List of Market Players Profiled

• Visa (U.S.)
• Riskified (Israel)
• RSA Security (U.S.)
• Ethoca (Mastercard) (Canada)
• Signifyd (Netherlands)
• Stripe (Ireland)
• Forter (U.S.)

REPORT COVERAGE

The report anticipates a detailed analysis of the global market size at the regional and national level, the ssegmentation market growth and market share. The prime objective of the report is to help user understand the market in terms of definition, market potential, influencing trends, and the challenges faced by the market. Aanalysis of sales, the impact of the market players, recent developments, opportunity analysis, strategic market growth analysis, territorial market expansion, and technological innovations are the subject matter explained in the report.