Sift’s Q1 2024 Digital Trust & Safety Index also reveals massive surges in payment fraud attacks for iGaming and ticketing, alongside new insights into consumer buying behavior
SAN FRANCISCO, March 26, 2024 (GLOBE NEWSWIRE) — Sift, the AI-powered fraud platform securing digital trust for leading global businesses, today released its Q1 2024 Digital Trust & Safety Index, which found that younger generations are not only more susceptible to fraud, but are also committing it at a higher rate. The report shows that 33% of Gen Z survey respondents know someone who has, or have personally, participated in payment fraud, compared to only 10% of Baby Boomers. Additionally, 34% of Gen Z consumers have seen offers to participate in online fraud, compared to only 9% of Baby Boomers.
“These generational divides are blurring the line between bad actor and consumer,” said Kevin Lee, VP of Trust and Safety at Sift. “Younger generations are composed of digital natives who are both facing troubling levels of economic anxiety and tend to be more trusting of digital spaces – often at the expense of their online security. They’re also exposed more often to offers to participate in fraud schemes. These converging factors mean merchants and payment processors have to think differently about the full spectrum of risk and how to stay ahead of it.”
In addition to surveying consumers, the Q1 Digital Trust & Safety Index relies on data from the Fraud Industry Benchmarking Resource (FIBR), a first-of-its-kind online tool powered by Sift, that allows anyone to access key fraud metrics across industries, geographies, and time. The report explores payment fraud increases across key verticals, payment attack rates for top card issuers, and shifts in consumer buying behavior due to trends in payment fraud. For example, findings indicate that fraudsters are turning their focus to high-velocity transactions in the hopes of staying undetected. Across the Sift Global Data Network in 2023, specific industries experienced major spikes in attempted payment fraud: iGaming saw a 93% increase, ticketing saw a 68% increase, food ordering and delivery saw a 53% increase, and retail saw a 46% increase.
Industry reports indicate that globally, merchant losses due to payment fraud reached $38 billion in 2023, and are expected to soar to a cumulative total of $362 billion by 2028. The start of 2024 brought increased economic pressure to both consumers and businesses, driven by persistent inflation and high interest rates. This economic anxiety has led to a shift towards value-seeking behavior, with shoppers preferring to purchase cheaper goods and services and “dupes” over premium brands. The macroeconomic backdrop is expected to remain unpredictable, with global events creating turbulence and increasing the likelihood of scams—many of which could be upleveled by generative AI.
Findings from Sift’s survey of 1,052 adults (aged 18+) across the United States in February 2024 highlight the impact of digital risk on economic uncertainty, revealing that the increased threat of AI-powered fraud is already influencing consumers’ online shopping behavior: 30% of those surveyed shop online less frequently due to the cybersecurity threats posed by artificial intelligence, and 76% would stop using or shopping on a site where they had been a victim of payment fraud. With 43% of consumers saying they have been a victim of payment fraud at least once in the past 18 months, there’s potential for meaningful impact to businesses’ revenue if the industry fails to get ahead of payment fraud attacks.
“As consumer spending habits evolve and fraud becomes supercharged by AI, businesses need to fight fire with fire, and leverage AI to their own advantage. It’s a necessary piece in the growing challenge of delivering consumer experiences that are seamless and secure,” said Kevin Lee, VP of Trust and Safety at Sift.
To read Sift’s Q1 2024 Digital Trust & Safety Index, click here.
About Sift
Sift is the AI-powered fraud platform securing digital trust for leading global businesses. Our deep investments in machine learning and user identity, a data network scoring 1 trillion events per year, and a commitment to long-term customer success empower more than 700 customers to grow fearlessly. Brands including DoorDash, Yelp, and Poshmark rely on Sift to unlock growth and deliver seamless consumer experiences. Visit us at sift.com and follow us on LinkedIn.
Media Contact:
Victor White
Senior Director of Corporate Communications, Sift
press@sift.com
