Will 2022 be the year of product/service marketplace fraud?

Will 2022 be the year of the marketplace? The popularity of online marketplaces exploded in 2020, taking almost half of all global ecommerce sales. Outperforming traditional competitors, they grew at double the rate of overall ecommerce. This year, the industry will continue to boom.

In five years, the global market value will grow from $3.5 to $8.8 trillion. Household names like Amazon and eBay will continue to dominate online sales. And mainstream retailers will launch their own marketplace platforms to stay competitive. Big names like Kroger and Decathlon are among the big names driving this trend.

The problem with rapid growth? You attract fraud. And you risk outgrowing your current fraud prevention solution if it’s not scalable. Without a handle on fraud, your winning streak could end as quickly as it started.

Let’s take a deep dive into your top fraud risks to help you protect customers and secure growth in what’s set to be an exciting year.

Watch out for seller fraud

Attracting sellers is all-important for marketplaces. But how can you make sure bad actors don’t sneak in?

Seller fraud is a growing problem. On Black Friday 2020, 1 in 5 of all products listed on marketplaces were thought to be fraudulent. But the industry has been slow to move against the threat, as only 34% of marketplaces see seller fraud as a risk.

This could be because it’s hard to detect. Sometimes bad sellers only surface after customer complaints come in, and by then the damage is already done. You need a proactive solution to create a healthy ecosystem for your sellers and buyers.

Is the five-star rating losing value?

Since 89% of shoppers read reviews before buying online, it’s crucial that customers trust your ratings system. So when fraudsters infiltrate your seller base, it can quickly erode trust. Over 80% of customers have recently spotted fake reviews, so it’s a growing problem.

Fraudsters can use bots to boost their seller ratings. If they get enough positive reviews, they’ll be promoted on your platform. And customers will be more likely to take the bait.

They can also hack older accounts of trusted sellers to benefit from their long-standing reputation. Account takeover attacks have recently risen for 65% of marketplaces. Hackers could be targeting you from every angle, so you need the right tools to spot connections across all of your data.

Customer security is more important than ever

If your business is growing fast, you won’t want to add any friction to the customer journey. Over 70% of ecommerce merchants don’t want to risk cart abandonment. And it makes sense! First-time customers will only return after a seamless experience.

But it’s a misconception that fraud prevention blocks sales - it actually does the opposite. Customers value online security now more than ever. Almost 90% of customers say they’d happily wait longer at checkout if it means their info is better protected. Good fraud prevention won’t increase wait time, but it could help you gain lifetime customers.

Read on for more statistics and insight on how to stay ahead of fraud in 2022…

Source list

• Industry value $8.8 trillion by 2025
• Online marketplaces take 47% of sales
• 81% marketplace growth YoY
• Only 34% of marketplaces see seller fraud as a risk
• Fraudulent products listed on marketplaces
• Black Friday fake iPhones, PS5s and fashion
• Dollhouse listing prank
• Account takeovers rise for 65%
• 82% of shoppers have read a fake review
• 73% don’t want to risk cart abandonment
• 87% of customers want better security