eCommerce Fraud Prevention

Fraud remains one of the most significant challenges facing eCommerce businesses, but the nature of that risk is rapidly changing. While many retailers traditionally focused on stolen cards and account takeovers, according to Adyen’s 2026 Fraud Report, first-party fraud is now the most commonly reported form of fraud globally, accounting for 44% of incidents.

This includes situations where legitimate customers dispute genuine purchases, abuse refund policies, or exploit promotions and loyalty programs. Identity abuse and fake accounts were reported by 42% of businesses, while policy and promotion abuse affected 40%. More traditional threats such as stolen cards and account takeovers were reported less frequently.

This shift highlights a growing challenge for retailers. Fraud is no longer simply about preventing unauthorised transactions. Increasingly, it involves identifying suspicious behaviour from authenticated users, verified accounts, and customers who appear legitimate on the surface. Adyen’s data found that a small percentage of customer identities can account for a disproportionate share of fraud incidents and refund activity, making behavioural analysis more important than ever.

The impact extends beyond direct financial losses. Fraud prevention systems that are too aggressive can create friction for genuine customers, leading to false declines, abandoned purchases, and lost revenue. Adyen reports that businesses across the Asia-Pacific region continue to face challenges balancing fraud prevention with customer experience, with many retailers experiencing increased manual review costs and higher rates of false declines.

The Australian market is also seeing rising fraud pressures. Adyen’s Australian Retail Report found that consumer-reported fraud losses nearly doubled year-on-year, while more than a quarter of Australian retailers reported losing over $1.3 million to fraud in the previous 12 months. Almost one-third of retailers also reported increased fraud attempts during peak trading periods, highlighting the growing sophistication and frequency of attacks.

As fraud tactics become more sophisticated, technology is playing a larger role in prevention. AI and machine learning systems can analyse vast amounts of transaction data in real time, identifying unusual patterns, suspicious behaviours, and emerging threats that may not be visible through traditional rule-based systems. The most successful strategies focus on reducing risk while maintaining a seamless customer experience. Modern fraud management platforms can assess hundreds of signals during a transaction, helping retailers approve more legitimate purchases while identifying genuinely risky behaviour.

This approach reduces customer friction while protecting revenue and brand reputation.