The COVID-19 pandemic reshaped consumer behavior, propelling e-commerce to newheights. People turned to online shopping, notably for groceries and household items, leading to a surge in Card-not-Present (CNP) transactions and a rise in chargebacks.
As digital interactions continue to dominate, CNP transactions replace traditional card-present ones, shifting liability for fraudulent purchases to merchants. While the rapid growth of digital commerce has stabilized somewhat, it remains significantly above pre-pandemic levels, underscoring the enduring prominence of e-commerce.
This evolving landscape has a profound impact on chargebacks worldwide. Despite regions introducing Strong Customer Authentication (SCA) measures, chargebacks remain persistent, necessitating a multifaceted approach to prevention.
According to the newest chargeback report by MasterCard, the global chargeback volume is expected to reach 337 million transactions by 2026, a substantial 42% increase from 2023 levels. Simultaneously, retail e-commerce sales are projected to reach USD 7.3 trillion by 2025, underpinning the risk of more consumer disputes and CNP fraud.
Global CNP fraud losses are forecasted to reach a staggering USD 28.1 billion by 2026,a 40% surge from the USD 20 billion in 2023. While Secure Customer Authentication (SCA) tools have proven effective in reducing fraud, adoption in the United States has been slow due to concerns about customer friction. In contrast, Europe has successfully implemented SCA measures.
Chargeback trends vary by region. Europe expects stable volumes with a decrease to USD 1.9 billion by 2026, partially due to the impact of SCA requirements. The Asia-Pacific region anticipates steady growth, reaching USD 4.5 billion in 2026, driven by rising e-commerce sales and adoption of alternative payment methods. Conversely, the rest of the world, including Latin America, foresees substantial growth, reaching USD 191 billion in 2026, fueled by the proliferation of e-commerce and digital experiences.
In conclusion, the e-commerce boom has reshaped the payments landscape, impacting chargebacks globally. As digital commerce continues to thrive, businesses must adapt and implement robust strategies to manage and prevent chargebacks effectively.