Top Threats to eCommerce Merchants

10 December 2020
Top three threats to online merchants

Black Friday sales this year soared to record heights, and the holiday shopping season has only just begun. As a result, threats to eCommerce merchants are rising. Hand in hand with COVID-19 lockdown, consumers have adapted to their new WFH makeshift offices. And, found themselves at the mercy of the internet, aimlessly scrolling through online shopping spaces more often than not. 

This November, Shopify announced $5.1 billion worth of #BlackFriday and #HolidaySales sales, from over 1 million eCommerce #merchants. Compared to $2.9 billion from 2019, this represents a vast increase of 76%! 

This has created opportunities for #eCommerce merchants to increase their sales, especially for independent and direct-to-consumer brands. However, this means online seller’s threats are mounting. Fraudulent attackers have increased their tenacity with greater opportunities to exploit money floating in the #cyberspace. 

For merchants to be able to capitalise on increased site traffic and higher sales orders, they need to be able to identify bad actors and look for red flags. It is vital that only secure transactions are authorised and legitimate payments are processed for business success.

Here are the top 7 Threats to eCommerce Merchants


Chargeback losses are now already 10 times higher than before the pandemic (BRC, 2020).

A #chargeback is a transaction where customers request the reimbursement of credit card charges from their card issuer to reverse a sales #transaction. These occur from customer disputes, fraudulent transactions, authorisation issues or processing errors. For merchants, a chargeback results in extra processing time, additional dispute costs and loss of revenue.


65% of organisations in the US suffered a successful #phishing scam this year (Tessian, 2020). Therefore, it is vital that merchants watch out for suspicious bad actors online and mitigate any risks of breaches.

Phishing #attacks attempt to trick people into opening malicious attachments that grant fraudsters account access or victim’s private identity. They do that by creating a sense of urgency using social engineering and technical ploys. 

Before the pandemic, these attacks were the root of more than 67% of data breaches! Meanwhile, in April 2020 alone, Google blocked 18 million phishing emails related to COVID-19, as fraudsters attempted to manipulate the uncertainty of current affairs. 

Merchants can counter phishing attacks by watching out for suspicious bad actors to future proof their business and maintain their customers’ seamless online #shopping experience. 

Account Takeover (ATO)

ATO is a rampant and present danger to eCommerce businesses. We’ve already seen #ATO fraud spike 378% since the start of the COVID-19 pandemic (Fintech Futures, 2020).

Such attacks occur when a fraudster exploits genuine user credentials obtained from automated bots across the web. They can gain unauthorised access and fraudulently misuse these online accounts. This can create detrimental damage to your customers lifetime value. 

This cost merchants over $5.1B in 2018 in the US alone (Pymnts, 2019). ATO’s lead to increased chargebacks and customer transaction disputes.

Top threats to eCommerce merchants: Statistics on account takeover fraud, refund fraud and phishing activity.

Identity Theft

Identity theft occurs when a malicious actor uses another person’s identity and financial details to commit fraud through creating false purchases, fake accounts and manipulating eCommerce site traffic. 

And, identity theft costs are soaring! In 2019, a record high $16.9 billion was stolen (Javelin Strategy and Research, 2020). Furthermore, this blow impacts merchants who suffer greater chargeback costs as customer’s dispute purchases and their customer experience is ruined. 

Less than 1% of successful identity thefts can bypass #BehaviouralBiometrics based authentication (ITAP). Therefore, integrating solutions which utilise behavioural biometrics can mitigate how susceptible eCommerce stores are to #IdentityTheft risks.


Malware is short for malicious software, includes viruses, worms, ransomware and spyware. A successful #malware attack allows fraudsters to spoof their identity and gain unauthorised network and data access undetected by either the customer or merchant. 

The average malware attack costs a hefty $2.6 million annually for mid-level enterprise businesses. This has risen 11% YOY. Further disrupting business operations, breaching private data and causing revenue and sales losses (Accenture Security, 2019).

Friendly Fraud

This seemingly sweet type of fraud is estimated to reach a shocking cost of $50 billion in 2020 (Mercator Advisory Group, 2020). #FriendlyFraud is far from friendly.

It occurs when cardholders had knowledge or were complicit with a legitimate transaction but reported it as unauthorised and filed a costly chargeback. 

To avoid reducing customers’ lifetime value, eCommerce merchants often allow these threats and costs to eat their profit margins. However, with new cyber solutions available, this does not need to be the case.

Top threats to eCommerce merchants: Statistics on friendly fraud, phishing attacks and account takeover.

Let’s prevent these threats

Fraud is rife. So are the new ways fraudsters are coming up to commit crimes. Every eCommerce merchant is obliged to take necessary precautions to protect their business.

We’re reducing threats to ALL eCommerce merchants. So let’s future proof your business together.

No one wants to be the victim in an online fraud attack. Although attacks are surging, this does not mean your risk as a merchant must also. 

Thank us later, your profits will!

Find out more.

By investing in secure technologies, eCommerce merchants can create strong defence systems which identify discrepancies and red flags only the legitimate threats to your business by utilising advanced Artificial Intelligence and Machine Learning models enhanced by Behavioural Biometrics. Cybertonica’s technological solutions operate flexibly in real-time and allow merchants to adapt their risk appetite levels and utilise our large data networks to identify repeat bad actors. 

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