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MRC 2017 Global Payments Survey
The Merchant Risk Council (MRC) is a global forum for ecommerce fraud and payment professionals. A survey conducted by the MRC found that MRC member merchants experienced lower fraud losses and order rejection rates compared to non-members. Specifically, MRC merchants reported a fraud loss rate of 0.5% versus 0.7% for non-members, and an order rejection rate of 2.6% versus 3.1% for non-members, indicating MRC membership helps merchants reduce fraud impacts. The survey also examined fraud trends and priorities by country and merchant size.
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MRC 2017 Global Payments Survey
- 1. MRC 2017 GlobalPayments SurveyPresented by Úna Dillon, Managing Director MRC Europe At the Adigital Conference 30th March 2017, Madrid
- 2. Introducing the MRC •The Merchant Risk Council (MRC) is the principal not for profit global forum for ecommerce fraud and payment professionals • Our Vision:- Making commerce safe and profitable everywhere • The MRC provides proprietary education and training as well as a forum for relevant discussions
- 5. Our Members • Multi-channeland e-commerce merchants – Merchants representing 95% of the top 20 ecommerce companies in the world. – Over 82% of the top 50 – 60% of the top 100 • Card Schemes (Discover, Visa, MasterCard, AMEX) • The top 20 payment processors • The top 5 alternative payment processors • Top 20 Risk Management Providers • Payment Card Issuers • Law Enforcement Agencies
- 6. A Sample ofour Membership
- 7. 2017 Global FraudSurvey Sponsored by CyberSource
- 8. 7% 6% 27%61% 2% Sample Demographics <$5M $5M – $25M 31% 6% 51% 7% 6% Other ServicesTravel Services Physical Goods Digital Goods Subscription Services Typeof goods and services sold Annual online revenue MRC Merchants MRC Merchants $100M+ $25M–$100M <$5M $5M–$25M
- 9. MRC Merchants ExpandingGlobal Presence North America 5% 6% 25% 10% 15% 12% 8% 31% 34% 45% 42% 82% Japan China Australia Brazil Mexico Italy Spain France Germany United… Canada United States Mentioned as Top 5 eCommerce Markets Europe South / Central America Asia Pacific
- 10. eCommerce Fraud LossVaries by Country n=23 n=26 n=19 n=14 n=12 n=16 0,5% 0,5% 0,6% 0,6% 1,0% 1,3% 1,5% 1,9% United States Canada Germany United Kingdom France Australia Brazil Mexico eCommerce fraud loss rate is defined as fraud-coded chargebacks plus credits issued in response to fraud complaints. eCommerce Fraud Loss Rate – by Country
- 11. Order Reject Rateby Country n=23 n=26 n=19 n=14 n=12 n=162,7% 2,7% 2,8% 2,4% 3,9% 2,9% 4,6% 14,3% United States Canada Germany United Kingdom France Australia Brazil Mexico Order rejection is defined as transaction the merchant decides to reject (automatically or manually) due to suspicion of fraud. Order Reject Rate – by Country
- 12. MRC Merchants AttainLower Fraud Losses eCommerce fraud loss rate is defined as fraud-coded chargebacks plus credits issued in response to fraud complaints. 0.6% 1.1% 0.5% 0.7% MRC Non-MRC 2014 2016 2014 2016 eCommerce Fraud Loss Rate North America
- 13. Manual Review Rateis comparable Manual screening is defined as those orders that are not processed or delivered automatically and go through a manual / back office analysis to determine if they should be accepted or rejected. 12% 15% 8% 8% MRC Non-MRC Manual Review Rate 2014 2016 2014 2016
- 14. MRC Merchants Focuson Core KPIs 9% 13% 5% 9% 14% 14% 18% 20% 33% 36% 55% 58% 6% 7% 10% 8% 15% 31% 14% 24% 30% 46% 77% Order authentication rate Friendly fraud rate Manual review rate – transaction… Rate of refunds issued False positive Manual review rate – transaction count Chargeback rate on maunual review Order rejection rate Fraud rate – by order volume Confirmed fraud rate Fraud rate – by value Chargeback rate MRC Non-MRC Percent of Merchants Selecting as One of Their Top 3 Fraud KPIs
- 15. Fraud Function OrganisationAccountability 32% 28% 9% 12% 19% 41% 25% 7% 15% 7% Finance Operations IT / Technology Customer Service Dedicated Team MRC Non-MRC Department Responsible for Fraud Management
- 16. Major Fraud ManagementChallenges 10% 14% 18% 22% 22% 27% 32% 41% 46% Keeping up to date on government regulations or rule changes by payment systems / card networks International expansion Lack of internal expertise Updating fraud risk models (e.g., score) Tracking false positives Tracking friendly fraud Identifying / responding to emerging fraud attacks Gaps in fraud tool functionalities Lack of sufficient internal resources
- 17. Merchant Improvement Priorities Totaln = 403 51% 45% 34% 31% 16% 10% 7% Improving automated detection accuracy Improving fraud analytics Streamling manual review tasks and workflow Improving chargeback dispute process Don’t know Create mobile- specific fraud rules Better managing omni-channel fraud Priorities for improvement Other Priorities • Reducing fraud prevention total cost • Improved fraud vendors • Detecting friendly fraud • Increase awareness on fraud • Focus on obtaining true SME talent • Reducing false rejects
- 18. MRC Merchants AreWinning Against Fraud Key takeaways • MRC members reported 29% lower revenue loss due to fraud • Lower order reject rate implies better order conversion 0.5% 0.7% MRC Non-MRC Fraud Loss Rate 2.6% 3.1% MRC Non-MRC Order Reject Rate
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- 20. Phone +353 (0)87 2047579 MRC Fraud & Payments EU Ltd. Suite 403, 1/3 Burton Hall Park, Burton Hall Road, Sandyford, Dublin 18, Ireland email una@merchantriskcouncil.org Contact the MRC