Koin, a fintech specialized in simplifying digital commerce through payment and fraud prevention solutions, releases the study “The Impact of Online Fraud in Latin America”, in collaboration with consulting firm GMattos. The survey highlights the growth of scam attempts in the region’s e-commerce and the challenges faced by merchants.
Estimates indicate that the total cost of online fraud (chargeback + prevention) can consume up to 1.9% of e-commerce stores’ gross revenue—a figure that directly impacts any business’s profitability. According to the study, reducing this cost by half could improve operational results (EBITDA) by over 30%.
In addition to operational data and country-specific numbers for the continent, the study introduces a novel approach: analyzing the fraudster’s perspective. The research revealed that organized criminal structures operate in three stages or roles. For credit cards, these are data mining (with card resale for up to $5), fraudulent purchases (3 out of 5 attempts succeed), and product resale (at up to a 50% discount). Meanwhile, Pix fraud involves data mining (when information is easily obtained), BOT contact (low-cost operation), and transfer and movement (with high liquidity).
Another concern is the growth of Pix fraud. The research shows that its 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 a focus for fraudsters, and effective prevention requires new layers of intelligence.
In response to this scenario, Koin’s antifraud system emerges as a strategic alternative, offering a fraud rate of just 0.09%, 98% transaction approval, and 99.9% uptime. With proprietary technology based on artificial intelligence and machine learning, the solution provides segment customization, behavioral analysis, geolocation, customer-invisible validations, and on-demand authentication, creating an agile, calibrated, and high-performance decision engine. The result is an improvement of up to 15 percentage points in conversion and up to 5x reduction in fraud costs, according to clients who adopted the platform.
Fraud, Conversion, and Profitability: The Portrait of Digital Commerce in Latin America
The analysis conducted by Koin and GMattos also presents an in-depth overview of the impact of online fraud in Latin America, revealing direct connections between scam attempts, checkout conversion rates, and operational profitability.
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%). While this growth creates opportunities, it also exposes vulnerabilities: Latin America has the highest chargeback rate in the world, exceeding the global average of 3.0%.
Moreover, according to the study, every 5 percentage points of improvement in conversion represent a potential gain of up to 50% in EBITDA for operations with lean margins. Meanwhile, reducing total fraud costs by half could increase companies’ operational results by over 30%.
Key Findings of the Study
Latin America Overview
- 55% of the region’s online sales are in Brazil
- Brazil, Mexico, and Colombia account for 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%
- Every 5 percentage points of improvement in conversion can increase EBITDA by up to 50%
- Reducing fraud costs by half can increase EBITDA by over 30%
The study “The Impact of Online Fraud in Latin America” can be accessed in full here.
