Fraud in Europe 2026: Ecommerce growth in Europe is reshaping fraud risk

Ecommerce fraud in Europe is increasing in scale and sophistication, forcing merchants to rethink how they manage risk from an operational perspective.

Ecommerce is now imperative for retail growth. Industry research from payabl.’s Fraud in Europe report shows that global ecommerce was projected to hit $6.86 trillion by the end of 2025, representing year-on-year growth of 8.3%. In parallel, the fraud problem has escalated: global ecommerce lost an estimated $44 billion to fraud in 2024, with losses expected to surpass $100 billion by 2029.

Digital payment fraud cases in Europe have more than doubled per 100,000 transactions between 2022 and 2024, highlighting how fraud is increasing alongside ecommerce growth, rather than remaining a marginal cost. Merchants are responding by prioritising online growth, but are becoming increasingly aware of the risk implications.

The data revealed that 57% of retailers say growing online sales is their top priority over the next 12 months, rising to 71% for SMEs, yet 28% explicitly name reducing fraud and theft as a key focus area in the same period. This mirrors broader findings from the MRC that fraud prevention remains a top imperative as organisations try to manage both growth and rising operational costs.

The real costs of fraud

Fraud has evolved into a revenue and productivity issue, and isn’t classified as just a risk marker for merchants. Across the merchants surveyed in the report, 85% say their business has been targeted by scams or fraud attempts in the last 12 months. Alongside this, business leaders spend an average of 3.6 hours per week on fraud-related issues, which is equivalent to around 166 hours a year (roughly one working month) lost purely to fraud management.

The financial cost of this is equally significant. In Germany, for example, every €1 lost to fraud translates into around €3.43 in total cost once labour, external fees, chargeback handling, and inventory replacement are included. Additionally, online card‑not‑present fraud losses in the UK rose to £225 million in 2024, an 11% increase on the previous year.

Looking at the types of fraud encountered by merchants, fake or fraudulent returns and refund abuse top the list, cited by 44% of businesses as the most common fraud they faced in the last 12 months. Purchases with stolen payment credentials (36%), chargeback fraud (31%), social engineering of employees into granting system access (28%), and cloned cards (26%) also feature prominently.

This pattern aligns with broader industry research showing that refund/policy abuse and friendly fraud behaviours are among the fastest‑rising pain points for merchants globally. For many merchants, fraud and its related charges act as an additional ‘invisible charge’ on the business, which reduces margins and absorbs resources that could otherwise be deployed on growth and revenue generation.

The toll on customer trust and brand reputation

The report underlines that fraud doesn’t just cause financial losses for merchants; it also directly affects brand reputation and a customer’s lifetime value. More than half of businesses (52%) say fraud has led to reputational damage, rising to 67% among larger merchants, and over one‑third (36%) reported a loss of income due to fraud, while 21% saw a drop in customer loyalty and 23% report a decrease in checkout conversion rates.

On the consumer side, 26% say they have been a victim of fraud, losing on average €330, with Millennials experiencing the highest average loss at around €550. Behaviourally, 41% of consumers (46% of women) now say they are more cautious when shopping online, 21% stop shopping with the retailer where fraud occurred, and 10% reduce their overall online spend. The emotional effect is also evident. Nearly a quarter of victims (23%) blame themselves when experiencing fraud, rising to 30% among Baby Boomers, with 20% feeling embarrassed for being exposed to fraud.

For merchants, this combination of these impacts means that a single fraud incident can cause knock-on effects for churn, acquisition costs, and brand perception.

How to approach peak moments

Looking at annual fraud occurrences, fraud isn’t evenly distributed across the year. Black Friday and Cyber Monday were identified by 37% of retail leaders as the periods with the highest fraud risk, ahead of summer holidays (33%) and January sales (30%). Additionally, nearly two‑thirds (64%) of larger businesses report a notable increase in fraud or scam attempts over the past year, with visible spikes around major promotional events, though 19% of merchants say fraud is effectively “always on” throughout the year.

In response to this, consumers are becoming increasingly alert to signals at the point of checkout. Six in ten (60%) say they will abandon their cart if something appears suspicious: poor grammar or low‑quality images (47%), requests for excessive personal data (40%), or suspicious reviews (36%).

Yet the data reveals an important generational nuance: cart abandonment when encountering red flags drops to 34% for Gen Z and 48% for Millennials, while 13% of Gen Z say they would proceed with the purchase regardless of warning signs. This more risk‑tolerant behaviour contributes to Gen Z being the demographic most likely to have been defrauded online (38%), compared to 21% of Gen X and 17% of Baby Boomers.

At the same time, strong security signals at the checkout phase can increase conversion when implemented thoughtfully. The features most likely to encourage completion of a purchase include extra security controls such as two‑factor authentication (33%), positive online reviews (32%), recommendations from friends or family (32%), secure third‑party payments like PayPal or Klarna (31%), and clear refund policies (30%). This echoes research showing that well‑designed authentication and transparent policies can support, rather than hinder, conversion.

Practical takeaways for MRC merchants and risk leaders

The report’s insights reinforce important priorities for fraud leaders in the risk and fraud prevention community.

• Quantify the full cost of fraud, not just the losses. Consider operational time, dispute handling, and inventory costs in your fraud KPIs, using benchmarks such as the 3.43x multiplier seen in Germany as a reference point for calculating total fraud costs
• Treat policy and refund abuse as a priority fraud category. With 44% of merchants identifying fake returns/refund fraud as their most common attack type, ensure your policies explicitly address and attempt to resolve this behaviour.
• Align controls with high‑risk periods. Use specific strategies around Black Friday, Cyber Monday, and major seasonal sales, which combine tighter rules, closer monitoring, and pre‑event customer education to minimise both fraud and false positives at peaks.
• Segment by generation and risk tolerance. Gen Z’s higher fraud victimisation rates and reduced tendency to abandon risky checkouts suggest a need for segmented education strategies and prevention measures.
• Formalise fraud governance and communication. Organise clearer fraud policies, ownership and escalation paths, and invest in proactive customer communication that defines security measures and expectations.

Across all of these areas, the data supports a unified conclusion: fraud is now a shared, ecosystem‑wide challenge that directly affects bottom-line revenue, customer experience, and long‑term trust. Looking forward, merchants that combine data‑driven controls with transparent communication and efficient fraud prevention tools are better positioned to protect margins, safeguard customers, and sustain online growth in an increasingly complex risk landscape within Europe.

Equip yourself with strategies to navigate retail fraud, and turn challenges into opportunities for growth with payabl.’s fraud in Europe: Counting the cost for retailers and shoppers report. Download your copy

For more on this topic, find us at MRC London, 13-15 April 2026. We hope to see you there!

About payabl.

payabl. is a financial technology provider offering payments and business accounts for businesses of all sizes, enabling companies to accept online and in-person payments, manage multi-currency business accounts, issue virtual and physical cards, and access over 300 local and alternative payment methods. Combining in-house development with strategic partnerships, payabl. delivers secure, compliant, and scalable financial solutions that help businesses optimise operations and expand internationally. The company has offices in London, Amsterdam, Frankfurt, Limassol, and Vilnius.

To learn more, visit: payabl.com