The global e-commerce market is projected to grow significantly over the next few years, with a market value expected to reach an impressive $11.4 trillion by 2029 but e-commerce fraud is also rising rapidly.
This marks a 63% increase from $7 trillion in 2024, driven largely by the rising adoption of e-commerce in emerging markets.
These regions are seeing a shift towards Alternative Payment Methods (APMs), which are playing a critical role in facilitating online purchases in markets traditionally less reliant on card payments.
APMs Revolutionising E-Commerce
APMs, which include digital wallets and account-to-account payments, are expected to account for 69% of global e-commerce transactions by 2029.
This payment evolution is particularly significant in markets with high numbers of unbanked consumers, enabling these individuals to shop online for the first time.
The study forecasts that 360 billion e-commerce transactions will be made using APMs by 2029, further enhancing accessibility and inclusion in the global digital economy.
Research author Lorien Carter noted that APMs have leapfrogged traditional card payments in many emerging markets, offering merchants a strategic advantage in attracting new users.
As merchants expand into new geographies, incorporating APMs at checkout will be key to optimising conversion rates and meeting local payment preferences.
Payment Service Providers (PSPs) are encouraged to partner with local payment companies to tailor offerings based on regional consumer behaviour.
E-Commerce Fraud: A Growing Threat
As e-commerce continues to flourish, so too does the threat of fraud. The study projects that e-commerce fraud will rise from $44 billion in 2024 to $107 billion in 2029, driven in part by the increasing sophistication of attacks, often powered by artificial intelligence (AI).
Fraudsters are leveraging AI to create deepfakes and synthetic identities, bypassing traditional verification systems and scaling attacks.
To combat this, merchants must implement AI-based fraud prevention systems capable of detecting emerging fraud patterns in real-time.
Additionally, adopting biometric identification methods, such as liveness detection, at checkout will help secure transactions and protect against increasingly sophisticated AI-driven fraud attempts.
By prioritising payment localisation and integrating robust fraud prevention systems, e-commerce merchants can navigate the evolving landscape, capitalising on growth while safeguarding their operations.
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