Building trust at scale: How to prevent e-commerce fraud in 2026

In recent years, online shopping has become a vital part of global retail, transforming how consumers and businesses interact. What once took place in physical stores now happens across digital storefronts, accessible 24/7. The convenience, speed, and variety offered by online retail have redefined the customer experience—from groceries to electronics to digital goods. However, this growth has also led to a rise in challenges like e-commerce fraud. How to

With over five billion internet users worldwide, the number of online shoppers continues to rise. This growth is driven by better internet access, advances in mobile tech, smarter payment gateways, and personalized shopping powered by data. In 2024, retail e-commerce sales surpassed $4.1 trillion globally, and the trend shows no signs of slowing. With innovations like same-day delivery, AR-powered shopping, and secure payment options, e-commerce is evolving to be more dynamic and customer-focused than ever.However, this surge has also paved the way for increasingly sophisticated fraudulent activities.

As ecommerce continues to expand, decision-makers in marketplaces must know how to prevent ecommerce fraud without sacrificing customer experience. This guide explains what ecommerce fraud looks like in 2026, why it’s growing, the most common fraud types that marketplaces face, and practical, modern strategies – grounded in layered security, risk-based authentication, and continuous monitoring – that reduce fraud risk while protecting conversion rates and customer trust.

“Ecommerce was the number one industry to suffer at the hands of authorized fraud scams, and by a considerable margin: more than 18 times the global average.”

Ira Bondar Fraud Platform Lead Veriff

As ecommerce continues to expand, decision-makers in marketplaces must know how to prevent ecommerce fraud without sacrificing customer experience. This guide explains what ecommerce fraud looks like in 2026, why it’s growing, the most common fraud types that marketplaces face, and practical, modern strategies – grounded in layered security, risk-based authentication, and continuous monitoring – that reduce fraud risk while protecting conversion rates and customer trust.

What is ecommerce fraud and why is it growing?

Ecommerce fraud refers to criminal or abusive activity that targets online merchants, their payments, customer accounts, and reputation. It includes payment fraud, account takeover, identity misuse, and chargeback abuse. Ecommerce fraud isn’t a single threat – it’s a collection of tactics targeting payments, accounts, and customer trust.

Fraud is growing because digital commerce keeps innovating and onboarding new customers and payment flows. Criminals quickly adapt to new channels, automation tools, and data leaks. In addition, the increasing velocity of online transactions and global marketplaces raises the attack surface while regulatory and privacy changes reshape how identity signals are shared – forcing fraud teams to rethink detection and verification strategies.

Business leaders should treat ecommerce fraud as a strategic risk that can erode margins, increase operational costs, and damage brand trust if not managed proactively. The cost of reactive remediation – chargebacks, refunds, legal defense, and reputational harm – often far outweighs the investment in prevention.

Common types of ecommerce fraud businesses face

Understanding specific attack types helps risk teams design defenses that are accurate and customer friendly. Below are the primary categories marketplace decision-makers should watch for.

Payment and card-not-present fraud

Card-not-present (CNP) fraud happens when criminals use stolen card data to place purchases without presenting the physical card. CNP fraud remains one of the highest-cost vectors for online merchants because it often results in chargebacks and lost inventory. Payment fraud also includes synthetic identity fraud – where attackers combine real and fabricated identity elements to create usable accounts – and mule accounts used to launder stolen funds.

As ecommerce grows, fraud follows – adapting quickly to new technologies, channels, and consumer behavior. This dynamic is evident in how automated bot farms and credential-stuffing tools have scaled attempts to test stolen card numbers and credentials across merchant sites.

Account takeover and credential abuse

Account takeover fraud occurs when unauthorized actors gain control of a legitimate customer account to make purchases, redirect shipments, or commit identity theft. Account takeover fraud often leverages credential-stuffing, phishing, and data broker leaks.

Account takeover fraud is particularly damaging for marketplaces because it undermines trusted buyer and seller relationships. Detecting account takeover requires monitoring for unusual access patterns, device inconsistencies, changes in shipping or banking preferences, and risky behavior that differs from the account’s historical baseline.

Friendly fraud and chargebacks

Friendly fraud (also called chargeback fraud) happens when a legitimate cardholder disputes a valid purchase – either intentionally (to get a refund while retaining goods) or unintentionally (due to confusion about billing descriptors or subscription renewals). Chargebacks are costly: they carry fixed dispute fees, lost revenue, operational overhead, and potentially higher processor rates.

Strong customer communication, clear billing descriptors, and proactive dispute evidence collection are vital to reducing friendly fraud without adding friction to genuine customers’ experiences.

Key warning signs and high-risk behaviors to watch for

Fraud teams should build a clear view of signals that elevate risk. Typical warning signs include:

– Multiple declined transactions followed by a single large approval from the same IP or device fingerprint.

– Shipping to high-risk or recently changed addresses, especially with expedited delivery requests.

– Mismatched billing and shipping regions combined with inconsistent device or browser fingerprints.

– New accounts making large or high-value purchases shortly after creation.

– Repeated login attempts, password resets from unfamiliar locations, or simultaneous sessions from geographically distant IPs.

– Multiple chargebacks from a single customer or card number across several merchant accounts.

Monitoring behavioral baselines and flagging deviations helps separate low-risk customers from high-risk transactions that warrant step-up checks. Because not all risk is equal, high-risk transactions should trigger step-up authentication while trusted customers move through checkout with minimal friction.

Why advanced fraud prevention is a competitive advantage

Advanced fraud prevention does more than reduce losses: it protects customer data, preserves user experience, and enables growth in new payment flows and geographies. When implemented well, fraud prevention becomes a differentiator – a source of customer trust that can improve conversion and reduce churn.

Layered, intelligent defenses let merchants accept more legitimate business while rejecting fewer good customers. That balance is crucial: overly aggressive blocking damages conversion and customer lifetime value, while permissive rules invite fraud and higher operational costs. Strong payment controls stop many fraud attempts before they ever reach fulfillment.

Modern fraud prevention platforms combine device signals, identity verification, transaction risk scoring, behavioral analytics, and (ML) learning models trained on diverse, recent data. Those systems should integrate with business rules and human review workflows to tune for each marketplace’s unique risk profile. Importantly, as fraud tactics constantly evolve, prevention strategies must adapt through ongoing analysis, updated security measures, and flexible detection models.

Best practices to prevent e-commerce fraud

Ecommerce has become the backbone of global retail, but with rapid growth comes rapidly evolving fraud risks. From account takeovers and refund abuse to increasingly sophisticated authorized fraud powered by AI and deepfakes, online merchants and marketplaces are facing threats that traditional controls can no longer stop. To protect revenue, customers, and brand trust, leading ecommerce organizations are shifting toward a layered, identity-first approach—combining AI-driven identity verification, biometrics, and ongoing authentication throughout the user journey. By verifying that users are real, trusted, and remain the same over time, businesses can reduce fraud without adding unnecessary friction, creating safer digital experiences that support both growth and customer confidence.

Taking the next step toward smarter fraud prevention

For marketplace decision-makers in the U.S., U.K., Brazil, Mexico, and Colombia, executing a pragmatic fraud strategy means three concrete steps:

– Assess: Conduct a rapid risk assessment of your current checkout flows, seller onboarding, dispute resolution, and data retention practices. Identify where most losses and false positives occur and map those to specific fraud vectors.

– Pilot: Implement a pilot that layers identity verification, device intelligence, and risk-based authentication on a portion of traffic. Use A/B testing to measure conversion impacts and tune thresholds. Start with higher-risk geographies or product categories where fraud is concentrated.

– Scale: Once pilots reduce chargebacks and false positives without harming conversion, roll controls out incrementally. Document playbooks for new threat patterns, and maintain a continuous improvement loop for models and rules.

Prevention is ultimately more cost-effective than remediation. Stopping fraud before fulfillment prevents inventory loss, chargeback fees, and brand damage. It also protects customer data and reinforces trust – critical advantages in competitive marketplaces.

To execute these steps, marketplaces should evaluate vendors and partners on several criteria: breadth of signal coverage (global device and identity signals), model freshness and adaptability, integration ease, compliance posture, and demonstrable results on false positives and chargebacks.

Effective ecommerce fraud prevention relies on a layered approach rather than a single solution, combining the right technologies, clear policies, and continuous monitoring to stay ahead of threats. Strong security measures protect personal information and credit card numbers, reinforcing customer trust while reducing chargebacks and the impact of data breaches.

When selection and implementation are done well, fraud prevention becomes a strategic enabler – allowing marketplaces to expand payment methods, enter new markets, and offer frictionless experiences to trusted customers while keeping fraud costs in check.

Protect your ecommerce business with modern, risk-based fraud prevention that verifies customers accurately without adding unnecessary friction. Explore how advanced identity and fraud detection solutions can help you reduce risk while maintaining a seamless checkout experience.