Koin, a fintech specialized in simplifying digital commerce through payment solutions and fraud prevention, releases the study “The Impact of Online Fraud in Latin America”, in partnership with the consultancy GMattos. The research highlights the growth of scam attempts in the region’s e-commerce and the challenges faced by merchants.
The estimated total cost of online fraud (chargeback + prevention) could consume up to 1.9% of the gross revenue of online stores — a number that directly affects the profitability of any business. According to the study, in cases of halving this cost, the improvement in operational results (EBITDA) can exceed 30%.
In addition to operational data and specific numbers from each country in the region, the study brings an innovative approach: an analysis from the fraudster’s point of view. The research revealed that organized criminal structures operate in 3 stages or functions. In the case of credit cards, these are data mining (with card resale for up to $5), fraudulent purchases (3 out of 5 attempts are successful), and product resale (with up to 50% discount). On the other hand, Pix frauds involve data mining (when data is easily obtained), contact via BOT (low-cost operation), and transfer and movement (with high liquidity).
Another point of concern is the growth of fraud through Pix. The research shows that the incidence doubled between 2023 and 2024, rising from 1.7% to 3.2% of registered unique keys. Given the immediate liquidity and low operational cost of the scam, Pix has become the focus of fraudsters, and effective prevention requires new layers of intelligence.
In response to this scenario, Koin’s anti-fraud system emerges as a strategic alternative, offering a fraud rate of only 0.09%, 98% transaction approval, and 99.9% uptime. With proprietary technology based on artificial intelligence and machine learning, the solution provides segmentation customization, behavioral analytics, geolocation, customer-invisible validations, and on-demand authentication, producing an agile, calibrated, and high-performance decision engine. The result is an improvement of up to 15 percentage points in conversion and a reduction of up to 5 times in fraud costs, according to platform adopters.
Fraud, conversion, and profitability: the portrait of digital commerce in Latin America
The analysis conducted by Koin and GMattos also presents a comprehensive overview of the impact of online fraud in Latin America, revealing direct connections between fraud attempts, conversion rates at checkout, and the profitability of operations.
The Latin American region shows strong growth in online sales, with Brazil leading the market (55% of the total), followed by Mexico (17%) and Colombia (9%). Although this growth creates opportunities, it also highlights vulnerabilities: Latin America has the highest chargeback rate in the world, surpassing the global average of 3.0%.
Furthermore, according to the study, every 5 percentage points improvement in conversion represents a potential gain of up to 50% in EBITDA in operations with thin margins. Reducing total fraud costs by half can generate over 30% increase in companies’ operational results.
Main study findings
Latin America Overview
- 55% of online sales in the region are in Brazil
- Brazil, Mexico, and Colombia concentrate over 80% of e-commerce
- Latin America has the highest global chargeback rate: above 3.0%
Conversion vs. Loss
- Average conversion rate in Latin American e-commerce: 70%
- In physical retail, this rate exceeds 95%
- For every 5 percentage points improvement in conversion, EBITDA can grow up to 50%
- Reducing fraud costs by half can increase EBITDA by over 30%
The full study “The Impact of Online Fraud in Latin America” can be accessed here.
