E-Commerce Report 2010: Fewer fraud attempts in online trade

COLOGNE, 02 December 2010 – The number of fraud attempts in European online trade has declined slightly. This is one of the results of the recently published E-Commerce Report 2010 by Deutsche Card Services, which analyses purchasing and payment behaviour as well as non-payment risks on the basis of real-life transactions. In case of the most popular e-commerce payment method – the credit card – fewer chargebacks after a cardholder complaint were caused by fraud attempts. This is evident from the fact that the share of chargebacks on the grounds that the purchase was not authorised by the cardholder or that the card was not presented fell by 7 pp. In contrast, the number of chargebacks stemming from logistical and formal failures during the transaction has increased. At 0.34%, the chargeback ratio is still low. It is palpably below the current shoplifting ratio in stationary business (0.5%), which was determined by the EHI Retail Institute, a scientific institute for the retail industry.

More instances of improper use of credit and Maestro cards
The Deutsche Card Services study found that the improper use of cards is the main reason for transaction rejections. Successful card transactions increasingly fail because the card is no longer valid or because the necessary information about the card’s validity is lacking.

Non-payment risk higher for men
The non-payment risk is higher for men than for women if card payments or direct debits are used. While the difference between the sexes amounts to only 0.04% for the chargeback ratio, it rises to 1.217% for direct debit chargebacks. Interestingly, the MasterCard chargeback ratio is 0.07% higher than the Visa ratio if men have made the purchase in question. In contrast, the ratios for women are virtually identical.

Higher non-payment risk in British shops
The non-payment risk is higher for both British shops and British customers and is above the European average. One reason why British merchants are attractive to international customers is that there is no language barrier. Unfortunately, that encourages online fraudsters, too. The Report shows that using the 3-D Secure security technology helps: The non-payment risk declines to 0.12% if online merchants use 3-D Secure.

Chargeback ratio declines further
The further, slight decline in the chargeback ratio (to 2.735%) went hand in hand with an overall decline in the importance of direct debits in e-commerce. The main reason is that fewer direct debits were rejected by the credit institutions on the grounds of insufficient funds on the accountholder’s account. According to Deutsche Card Services, the share dropped from 71.41% to 66.28%. Encouragingly, fewer expensive direct debit chargebacks occurred due to differing or wrong account numbers or accountholder names or on the grounds that the account was a savings account. Direct debits from a savings account are not possible.

Higher transaction values almost always result in higher non-payment risks
The equation “higher transaction value = higher non-payment risk” applies to all card payments in e-commerce and, with one exception, to direct debits. According to the study by the Deutsche Bank subsidiary, the direct debit chargeback ratio is highest for the transaction value category of EUR 100 – EUR 500 (3.348%). Weekend trips, for example, often belong to this category. The direct debit chargeback ratio drops to 1.370% for luxury goods worth more than EUR 500.

E-Commerce Report based on real-life purchasing transactions
The E-Commerce Report analyses purchasing and payment behaviour and non-payment risks in online trade and has been published since 2002. In contrast to other research, the study by the Deutsche Bank subsidiary is based on real-life purchases and not on surveys. It starts from about 24 million transactions processed via the Deutsche Card Services platform. All data are fully anonymised and comply with all data-protection requirements. The study is available for download from the online shop of Deutsche Card Services.

About Deutsche Card Services GmbH:
Deutsche Card Services broadens the range of cash management services offered by Deutsche Bank and offers international full-service solutions for debit and credit card acceptance and other non-cash payment methods. Proven risk minimization systems ensure that non-cash payment in e-commerce, in mail-order retailing and at the point of sale is easy, quick and secure. Unique online steering systems enable customers world-wide to monitor all of their transactions at any time. When implementing efficient payment solutions, the acquirer and payment service provider can rely not only on years of experience and a dependable technical platform, but, as part of the Group’s Global Transaction Banking (GTB) department, also on the global network of Deutsche Bank Group and its highly qualified resources as well as detailed global and local expertise.
www.deutsche-card-services.com

Press Contact:

Deutsche Card Services GmbH
Tobias F. Hauptvogel
Head of Marketing & Communications
Kaltenbornweg 1-3
50679 Cologne
Phone: +49 221 99577-0
Telefax: +49 221 99577-8728
pr.deucs@db.com
www.deutsche-card-services.com

This release was published on openPR.