Merchants who distribute goods and services digitally face higher fraud losses

[mandy]

While staying ahead of fraud is something all online merchants face, those who distribute goods and services digitally face higher fraud losses than merchants in other product categories, with fraud loss accounting for 1.5% of accepted orders versus an average 1.2% among all online merchants. According to CyberSource Corp.’s 9th annual Online Fraud Report, fraud loss also represented 1.8% of online revenue, compared to 1.3% among all merchants it surveyed.

“The fraud rates are higher for digital merchants in general, and part of that is the unique nature of the goods. When you have a physical piece of merchandise you have more time to assess the transaction before you deliver it and at the end of the day, you have someone signing for it,” says Lauren Wang, market manager for media, entertainment and telecom at CyberSource. “With digital distribution, you have an e-mail address. A lot of the tools for identifying fraud aren`t applicable for digital delivery of goods and services.”...

full article: http://www.internetretailer.com/dailyNews.asp?id=26908