In retail, e-commerce transaction security has been a constant concern due to the persistent threat of fraud. The 2023 Fraud Map, published by ClearSale, has compiled the main data regarding online shopping fraud attempts in Brazil over the past year, including the product categories most sought after by fraudsters, the target audience, and the payment methods most affected.
During the entire last year, over 3.7 million fraud attempts were recorded, accounting for 1.4% of all orders placed on e-commerce platforms. As for the target audience, men are usually the primary targets, with the value of the attempts reaching 1.1 billion Brazilian reais, considering an average purchase ticket of R$1,042.09. Individuals aged 25 and under are also the most affected compared to other age groups, accounting for 1.9% of the fraud attempts. Note: I maintained the use of "R$" for Brazilian real as it's a standard currency symbol. I also converted the temperature symbols (º) to degree symbols (°) as they appeared to be encoding artifacts in the original text. The numbers followed by "%" and similar codes were interpreted as percentages based on context.
The report also indicates that this movement has affected the retailers' sales performance: the average ticket for fraud attempts in 2023, at R1,4925.44, was twice as high as the average ticket for legitimate orders. Consequently, fraud impacts the most significant transactions in retail. Note: I maintained the BR currency format (R1,4925.44) although there seems to be a typo in the original number formatting. If you need to clarify or correct the monetary value, please provide the proper number.
The first edition of the study commissioned by Pagaleve – a fintech company offering Pix Parcelado (Installment Pix) – and conducted by GMattos Consulting shows that in March 2024, the average cost of fraud management for retailers represents approximately 1.91% of their revenue, including costs associated with chargebacks and anti-fraud tools. Therefore, payment methods that reduce risk become even more relevant for retailers.
Anti-fraud payment methods
The Fraud Map indicated that among the most commonly used payment methods in fraud attempts during 2023, credit cards ranked second, accounting for 3.4 million attempts, equivalent to 3.4 billion reais; surpassed only by bank slips, with 121.7 million fraud attempts, reaching a total of 13.1 million reais.
On commemorative dates, there is typically an increase in fraud attempts. On this year's Mother's Day, for example, Clearsale data indicates that fraud attempts totaled approximately R$92 million, 4.11% higher than the previous year.
Here's the translation to English: "It's understandable that credit cards are often used for installment payments since they're a widely adopted payment method among Brazilians, in addition to being traditional. However, it's important to note that there's already an installment payment method that doesn't require a credit card: the Pix Installment Plan. This payment method reduces merchants' fraud-related costs while providing an additional payment option, enabling more consumers to shop at the retailer's e-commerce platform," explains Guilherme Romão, Chief Risk Officer at Pagaleve. "Furthermore, Pix Installment companies like Pagaleve bear any risk and costs related to fraud," adds Romão.
The translation is: Pix Parcelado (Installment Pix) represents a form of financial inclusion for consumers who aren't fully served by credit cards – thereby contributing to business expansion and increasing retailers' conversion rates. Note: I translated "Pix Parcelado" literally as "Installment Pix," keeping "Pix" untranslated as it's a widely recognized Brazilian payment system. I've also included the Portuguese term in parentheses for clarity while making the English version flow naturally.
"Just as you now rarely find online stores without the credit card payment option available, we believe that in the near future, those retailers who do not adopt the Installment Pix will be left behind. The trend is for this payment method to grow even more in the coming years and become established as one of the most widely used payment methods in our country," concludes Guilherme.
