US-based fraud detection provider Sift has released its Q1 2024 Digital Trust & Safety Index, which reveals that Gen Z is the closest generation to fraud. According to the report, younger generations exhibit both higher susceptibility to and involvement in fraud compared to older generations.

The findings reveal that 33% of Gen Z respondents either know someone involved in payment fraud or have personally participated in it, contrasting with only 10% of Baby Boomers. Moreover, 34% of Gen Z consumers have encountered offers to engage in online fraud, while the same is true for only 9% of Baby Boomers. Representatives from Sift remarked on the blurring lines between consumer and bad actor, attributing this phenomenon to younger generations' digital nativity, economic anxiety, and inclination to trust online spaces.

They emphasised the need for merchants and payment processors to adapt their risk management strategies to address evolving threats. The Q1 Digital Trust & Safety Index draws on data from the Fraud Industry Benchmarking Resource (FIBR), an online tool by Sift, alongside consumer surveys. It examines increases in payment fraud across various industries, shifts in consumer behaviour due to fraud trends, and highlights the rise in high-velocity transactions targeted by fraudsters.

Details about payment fraud losses Globally, merchant losses due to payment fraud reached USD 38 billion in 2023, with projections suggesting a cumulative loss of USD 362 billion by 2028. Economic pressures, including inflation and high-interest rates, have intensified consumer and business uncertainties, leading to a preference for value-driven purchases and an increased susceptibility to fraud. Sift's survey of 1,052 adults in the US in February 2024 underscored the impact of digital risks on economic uncertainty.

30% of respondents shop online less frequently due to AI-powered cybersecurity threats, and 76% would cease using a site where they experienced payment fraud. With 43% of consumers reporting payment fraud incidents in the past 18 months, there is a substantial risk to businesses' revenue if fraud prevention measures are not effectively implemented. Sift officials also emphasised the necessity for businesses to leverage the capabilities of AI in combating fraud, asserting its role in delivering secure and seamless consumer experiences amidst evolving threats.

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