Online Merchants Face Rising Fraud Rates as AI Tools Lower Attack Costs

Retailers face rising fraud losses as bad actors deploy low-cost artificial intelligence tools at scale, according to global payment processor Worldpay. A survey of 1,466 payment specialists across major markets including Australia shows fraud as a percentage of merchant revenue is climbing.

The shift leaves digital store operators fighting automated attacks at checkout while trying to prevent unnecessary transaction rejections that destroy legitimate sales. Traditional card-not-present theft remains common, but pressure is shifting rapidly towards bot-driven credential stuffing, account takeovers, and refund abuse.

The Cost of False Declines

Rejecting good customer transactions out of caution carries a steep penalty. When checkout software incorrectly blocks a legitimate shopper, merchants lose both the immediate basket and the customer acquisition cost spent bringing that buyer through the sales funnel.

Colin Baines, vice president of commercial and country manager at Worldpay, said false declines act as a silent drag on merchant margins. Using risk-based authentication backed by device intelligence and behavioral analytics allows retailers to challenge suspicious orders without adding friction to trusted buyers.

Optimizing payment routing improves conversion. Implementing network tokenization, managing card credentials across their lifecycle, and configuring soft-decline retry schedules give merchants measurable lifts in completed orders across domestic card networks.

Cross-Border Payment Routing

Cross-border expansion introduces friction when checkouts fail to support local acquiring banks or domestic payment preferences. Presenting buyers with unfamiliar currencies, foreign checkout flows, or rigid 3D Secure rules increases cart abandonment.

For retailers trading across Asia-Pacific markets, pairing stored network tokens with domestic acquiring infrastructure lifts card acceptance rates and cuts interchange processing expenses. Baines said store operators must treat payment routing and compliance as active components of their commercial strategy rather than administrative checkout settings.