Many aspects of the world economy are beyond the control of corporations. There is little they can do to curb inflation, unblock supply chains, or stop a war. But they can optimize the way they run their business, and a new Stripe report finds that one of the biggest drags on growth is something businesses do have power over: e-commerce fraud.

Combining data from billions of transactions across Stripe's network between 2019 and 2021 with a survey of more than 2,500 businesses across 9 countries, the report illustrates global patterns of fraud across all markets and business models. It details the growing burden global businesses face from online commerce fraud, the difficult decisions they must make, and the steps they can take to defend themselves and protect their profits. Among the main conclusions are:

Nearly three-quarters of companies have redirected engineering resources, and more than half have restricted expansion plans, due to fraud-related issues.
Subscription companies are the ones that fight fraud the most. 72% believe they will lose more money to fraud in 2022 than in 2021.
The volume and sophistication of fraud varies dramatically between markets, requiring tools that are tailored to local fraud patterns. France has nearly twice the fraud rate of Germany, while Singapore has half the rate of the Asia-Pacific region.

“Fraud doesn't slow down when the economy does. It's vital that businesses maximize the value of every dollar by turning away as many fraudsters as possible without blocking good customers, and this report shows them how they can do that," said Will Megson, product manager for Stripe Radar, Stripe's leading product. Stripe fraud prevention.

More fraud, more options
More than half of the companies surveyed indicated that fraud is a growing concern. The current changing risk environment has had a particular impact on companies offering B2B SaaS products and B2C subscriptions. These businesses are more susceptible to fraud, the report explains, because "they are most likely to be well-known brands, making it easier for fraudsters to resell the stolen goods or services (such as buying a digital subscription with a credit card). stolen, and then sell it at a lower price).»

Business leaders face difficult decisions about how to respond. The more they try to prevent fraud, the more likely they are to block legitimate charges. The report identifies the optimal sensitivity of a fraud model based on a company's margins: the higher the margins, the less sensitive the model should be. Businesses can also mitigate the risk of fraud through a thorough manual review of charges made, but this requires a lot of effort on a human level, something businesses often can't afford.

Improvements to Stripe's fraud prevention tools help businesses maximize revenue
In the last year, Stripe has invested substantially in its fraud prevention tools to help businesses maximize resources in a time like the current economic downturn. In 2021, Radar managed to reduce the percentage of incidents by 40% and the new improvements introduced this year are helping companies such as 7-Eleven, AdBlock, the British Council, Deliveroo or Kickstarter, to save money, generating income and freeing up resources that they can dedicate to the main activities of the business.

Regular updates to Radar's machine learning models help block more fraud attempts while allowing more good customers to trade. Stripe estimates that the improvements made in May block an additional $40 million in fraud and recover an additional $70 million in revenue for users each year, on top of the billions of dollars Radar has already saved them.

Adblock, which helps more than 100 million users protect their privacy and control their online experience, is using Radar and Stripe Checkout to accelerate its global expansion while protecting its transactions.