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The latest report from Juniper Research indicates that eCommerce retailers are in store for a storm of card-not-present (CNP) fraud over the next 5 years.

The research indicates that retailers should expect to see CNP fraud losses around $130 billion between 2018 and 2023. More sophisticated fraudster techniques, coupled with a delayed rate at which merchants invest in the latest FDP solutions as eCommerce transactions increase, is what's contributing to the record-setting fraud loss estimates.

Juniper's analysts suggest that merchants are hyper focused on fraud risks at the point of transaction, but are less focused on investing in behavioral monitoring technology, or having the means to validate identities of a specific user to prevent the fraud risk before the transaction occurs. That disconnect, the report suggests, is what is leading to an increase in CNP fraud. FDP solutions are often seen as a "high-cost-tool used only to prevent fraud." What's lacking is an investment in tools that understand behavioral patterns, the report noted.

Instead, Javelin's report indicates that merchants should be investing in a multi-pronged fraud detection/prevention approach to proactively attach fraud before the point of transaction.

“A layered FDP solution naturally helps directly preventing fraud, but it also offers major gains in terms of recovering potentially lost revenue through false positives. This is something about which retailers remain undereducated, and has allowed fraudsters to capitalize on relatively low FDP spend,” explained research author Steffen Sorrell.

Juniper estimates that digital payment players will spend $9.6 billion annually on FDP solutions by 2023, with a majority of that spend driven by financial institutions and payment service providers. As the need to manage open banking systems and faster payment mechanisms become prevalent in the marketplace, Juniper estimates the financial institution and payment service provider ecosystem will invest heavier into more sophisticated FDP solutions.