A Vesta Report Finds a Spike in CNP Fraud in a Flourishing eCommerce Economy

Tuesday, January 25th, 2022

Even though the percentage of card-not-present (CNP) fraud activity remained stable between the Q1 of 2020 and the same span in 2021, the average ticket value for deceitful CNP transactions increased over that period, according to a report from Vesta Corp, a fraud-protection agency.

Fraudsters are Focusing More on CNP scam

Overall, the average value for a scam CNP payment increased from $126 in Q1 of 2020 to $134 in Q1 of 2021. According to the research, the peak for CNP fraud occurred in the last quarter of 2020, when the ticket value touched $155. This shows that fraudsters were more active in CNP fraud although just 10 percent of the payments were fraudulent.

Vesta attributes the lower rate of possible fraud to the increased number of total CNP transactions over the Festive season. In the meantime, the ticket value for illegitimate CNP payments was $139 in the 2nd Quarter of 2020, then plummeted to $108 in the 3rd Quarter, before spiking again in the 4th Quarter. 

Despite the fact that the ticket value for CNP fraud decreased from the 4th Quarter of 2020 to 1st Quarter 2021, the significantly higher ticket in 2021’s 1st Quarter compared to the same period 2020 indicates that CNP fraud may cause more financial problems for retailers moving forward. 

According to Vesta, the rise in CNP fraud correlates with the phenomenal surge in online sales. Shoppers worldwide spent $4.28 trillion dollars buying items and services online—to represent a 27 percent jump.

CNP Fraud in the US 

Estimates show e-commerce sales in the US hit $861 billion in 2020, a 46 percent rise, the strongest yearly growth rate in a two-decade span. 

Despite a low rate of possible CNP fraud in the United States, where Vesta has a substantial client base, the ticket value for phony CNP payments went up rapidly beginning in 2020’s 1st Quarter and peaked in the 3rd Quarter. 

During 2020’s Q1, the ticket value for CNP fraud in the United States was $169, with just 3% of payments being malicious. During the 3rd Quarter of 2020, it went up to $189, while the rate of suspicious transactions stayed unchanged at 3 percent. The ticket value fell to $149 in 2020’s 4th Quarter, with 4 percent of purchases being suspicious, before rising again to $179 in 2021’s 1st Quarter.