Ecommerce Fraud Management: Gaining Competitive Advantage

Global ecommerce retail sales have grown more than 300% since 2014. It is estimated that the value of global sales in 2022 is around $5.7 trillion and will reach $8.1 trillion by 2026. Unfortunately, the value of ecommerce fraud committed in 2022 globally is estimated at around $41 billion. This clearly shows that not only the sales grow, but so does the fraud.


Fraud and its impact on the company’s finances

The extent of fraud and its consequences vary by company, but the chances of becoming a victim are the same for all. Fraud cases have not decreased over the years; on the contrary, they have increased rapidly. The number of scams committed is proportional to the amount of ecommerce retail sales. As a result, since ecommerce has been booming over the last decade, so has fraud. 

Recommended reading: Holiday Season Fraud Threat Monitor

Deceptive payments have a significant financial impact on businesses. Companies are not only required to return the money to the consumer, but they are also unable to recover the product from scammers. Chargebacks and product losses place a significant strain on the financial health and stability of businesses, as well as prevent further development.

“Deceptive payments have a significant financial impact on businesses”


Development and expansion

Businesses that are constantly losing revenue and incurring financial losses are unable to develop and expand, which is usually required to remain a market player. Some industries are so competitive that even the smallest developments, for example, improving a part of operations can result in significant changes, in terms of a company’s position in the market. Even if developments are minor, a company has an excellent opportunity to gain a competitive advantage over its competitors. However, businesses that fail to prevent fraud tend to incur heavy losses, both in terms of finances and brand reputation. As a result, they are limited in their ability to re-invest and improve their position in the market.


Poor prevention systems

A major problem faced by merchants, who decide to incorporate a fraud prevention solution, is the quality of each software. Even though they serve the same purpose, preventing fraud, each solution’s capabilities are different. Some tools aren’t accurate enough and allow fraud to take place, while others are too strict and end up blocking valid transactions. So, what should businesses look for in a fraud protection tool?

The best fraud protection tool, ideally, can provide a high acceptance rate, while still putting an end to fraudulent transitions. A high acceptance rate is important because genuine customers are not bothered during their shopping time. Customers are rather sensitive to interruptions and can abandon their shopping carts because of one. So, not intervening customer’s shopping journey is important, but so is effectively preventing fraud. If a solution is too inaccurate, the fraud will continue to take place and the point of having an anti-fraud tool will eventually vanish.

“A major problem faced by merchants, who decide to incorporate a fraud prevention solution, is the quality of each software.”


Well-developed fraud prevention solutions

What most businesses lack are well-developed fraud protection solutions capable of detecting fraud accurately while not interfering with legitimate customers’ orders. Because different fraud prevention software can be built on different foundations and ways of working, resulting in different outcomes, the information perceived online can be misleading. Almost all fraud prevention systems, however, are marketed and presented in the same manner, even though they share significant differences.

Businesses can ensure that deceptive payments are rejected and legitimate payments are processed further by acquiring a well-developed fraud protection solution. If the fraudulent payment is processed further, the software provider will cover the cost of the chargeback and the product loss. Companies that implement a proper solution also benefit from the ability to reinvest their profits in further development, expansion, and competitive advantages rather than losing the funds to fraudsters. This situation is an ideal scenario for most businesses, operating in the high-risk goods or services industries.



If you decide to invest in a well-developed fraud prevention system, you might want to consider Protectmaxx. Alphacomm has created a fine fraud detection solution that works with the greatest precision and produces the best results. Protectmaxx is capable of protecting merchants in a wide range of industries. Protectmaxx is so secure, that it comes with a 100% chargeback guarantee, allowing you to focus on future developments, expansion, and staying ahead of your competition. Would you like to discuss the possibilities in depth? Feel free to contact us anytime.

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The Netherlands

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