Merchant Risk Council expands operation to fight e-commerce fraud

While the loss of e-commerce revenue due to payment fraud is 3.6% globally and reaches 4.2% in Latin America, Trade Risk Council members report an average loss of 0.7% among their members. With changing shopping patterns, the rise of online transactions and accelerating inflation, fraud rates and fraud management trends are also on the rise.

The 2022 Global Payments and Fraud Report, released by the Merchant Risk Council (MRC), shows consistent growth in nearly all key fraud performance indicators and an increase in fraud losses for global merchants. MRC’s network of members, spread across Asia Pacific, Europe, North America and reaching Latin America, proves that working together produces more effective and efficient results in preventing fraud. The 2022 report shows that the global loss of e-commerce revenue due to payment fraud exceeded 3.6% (3.1% the year before). Conversely, MRC members reported revenue losses of 0.7% (0.8% a year ago) due to payment fraud compared to non-members of 3.7% (3.4% a year ago).

According to the report, identity theft, pharmacy, whaling, as well as card testing, identity theft and abuse are the most prevalent types of fraud, with merchants suffering an average of three types of attacks and spending around 10% of their annual e-commerce revenue managing payment fraud.

“MRC has worked tirelessly to defend our global members, to help them fight fraud, simplify payments and improve the customer experience,” said Julie Fergerson, executive director of the Merchant Risk Council. “MRC-affiliated merchants stand out compared to non-members. Members report significantly less e-commerce revenue loss than non-members,” she continues. “This is clear evidence that the education, collaboration and knowledge sharing that the MRC promotes among its members is having a significant impact. We are very excited to now expand our efforts in Latin America, especially at a time when inflation is affecting the economy.” and fraud rates are rising.”

The various organizations that make up the MRC share this desire to leverage knowledge and new technologies to improve payment orchestration and fraud mitigation efforts.

“Sharing knowledge and ideas, along with investing in the latest technologies available, is essential for corporations and retailers to reduce fraud-related revenue losses and increase loyalty,” says Eduardo Goni, head of ACI Worldwide in Brazil. “Artificial intelligence, incremental machine learning, speed, time-to-market and global experience with local customization by product, industry, channel and geography are powerful and diverse tools that keep customers and consumers safe, anytime, anywhere.”

MRC’s expansion into Latin America will be overseen by two newly appointed co-heads of MRC LATAM, Thais Fischberg, VP of Products at Adyen and Jean Christian Mies, General Manager for the Americas at PPRO. Two experienced industry leaders shared their thoughts on regional fraud and payment challenges and trends at the MRC Connects event in Miami this October.

“The wide variety of payment methods available highlights the importance for local and international companies to carefully adapt their payment and risk management strategies when selling to customers in Latin America,” says Jean Christian Mies, General Manager Latin America at PPRO and one of the MRC’s co-leaders LATAM. “As a highly influential global membership organization, the MRC will play a key role in spreading knowledge about payments and fraud and contribute to building a community of industry professionals in Latin America.”

The region’s dynamic fraud environment and rising fraud KPIs indicate another opportunity for MRC to serve as a valuable resource for local merchants.

“It’s a very exciting market when it comes to payments and fraud prevention,” says Thais Fischberg, vice president of products at Adyen and one of the regional leaders. “The MRC will be a great asset to the region, helping merchants and payment service providers work together to grow our industry and make e-commerce safer for everyone in Latin America and beyond.”

The Global Payments and Fraud Report 2022 provides key global and regional insights provided by 1,060 merchants surveyed across four major geographies, with broad coverage across multiple size levels, sales channels, categories and industry verticals.