Read Our Blog

E-Commerce Frauds in 2025: Everything You Need to Know

August 22, 2025

Key Takeaways

• According to Blackbox Research, the e-commerce market in Southeast Asia is set to reach a value of over USD300 billion (RM1.27 trillion) by 2028, signifying a rampant growth in the region’s digital economy, with digital financial fraud being a highlighted risk.

   

• Common forms of e-commerce fraud include:

  1. Account Takeover (ATO) Fraud – This is when someone sneaks into your customer’s account and shop without permission, transfer money, or steals their personal details - and you might not know until the damage is done.

  2. Card-Not-Present (CNP) Fraud – When someone uses stolen card details to buy from your online store.

  3. Chargeback Fraud – Imagine a customer makes a real purchase, gets what they paid for, then turns around and tells their bank they didn’t - so the money gets pulled back from you.

• Fiuu helps e-commerce businesses mitigate fraud risks via our Fraud Risk Management Framework, powered by machine learning and a dedicated in-house team to track, flag and evaluate suspicious activities.

Overview

We all love the convenience of shopping online, with just a few taps on our mobile phones. This contributes to the e-commerce boom in Southeast Asia, with a projected market value of over USD300 billion (RM1.27 trillion) by 2028. However, with exponential growth rates for the region, comes rampant increase in financial fraud, amounting to almost USD37 billion annually in fraud losses.

While businesses flock to tap into the e-commerce boom, fraud prevention and risk mitigation remains one of the strongest concerns for business owners, as chargebacks and refunds lead to losses in the long run.

Common forms of E-commerce Frauds

1. Account Takeover (ATO) Fraud

   ATO is when a cybercriminal takes over your account or credentials, commonly through phishing, data breaches or via other malicious means. Once access is gained to the account, cybercriminals can make unauthorized purchases using saved details, leading to chargebacks and refunds, often incurring a loss for the business.

2. Card-Not-Present (CNP) Fraud

   CNP refers to transactions made without the presence of a physical debit or credit card. CNP fraud is the most common fraud in e-commerce as it is the hardest to detect and verify the purchaser as the valid cardholder.

   While risk mitigation is available in technologies such as Click-to-Pay and Tokenization, a robust fraud prevention framework is required to protect business-owners from long-term financial losses caused by chargebacks and unauthorized purchases.

3. Chargeback Fraud

   Chargeback Fraud is a direct transaction dispute via the issuing bank, from a legitimate account or cardholder. It is commonly referred to as “friendly fraud” or “first-party fraud” as it usually comes from a valid customer who made the purchase themselves, then dispute it claiming it is an unauthorized purchase.

   Approximately 1 in 4 consumers have admitted to engaging in friendly fraud. Often, businesses are expected to bear the losses from chargebacks due to the benefit of the doubt and time-consuming disputes.

How Fiuu’s Fraud Risk Management Framework can help your e-commerce business

1. Real Time Fraud Monitoring System (FMS)

   Fiuu’s Smart Payment Gateway monitors transactions in real-time, using machine-learning to identify and flag suspicious activities for potential fraud risks, keeping your business one step ahead, always.

2. Dedicated Fraud Monitoring Team

   Our in-house Fraud Monitoring Team analyzes transaction patterns and flags identified by the machine-learning monitoring system. Flagged transactions are reviewed and cross-checked with external parties like card issuers and financial institutions, with merchants kept closely informed of any potential fraudulent transactions.

3. Automated Fraud Scoring

   Fraud Score is generated automatically based on transaction risk signal analysis and flags. This helps to assist businesses in assessing the potential risk of fraudulent transactions before they incur any further losses.

Conclusion

With the strong risk of fraud that e-commerce businesses face in this digital landscape, utilizing a smart payment gateway with robust fraud risk management framework like Fiuu is vital to ensuring risks are mitigated and long-term financial losses are prevented.

As Southeast Asia’s Leading Payment Gateway, Fiuu is proud to offer our PCI DSS and ISO 27001:2022 certified secured payment solutions for your e-commerce businesses.

Ready to protect and scale the digital payment acceptance for your business? Register now at booster.fiuu.com or reach out to our friendly team at [email protected] today!