Online orders originating in Indonesia, Pakistan and Romania have high fraud rates

Orders placed by consumers using IP addresses and billing addresses in these countries have the highest incidences of fraud, a new report says.

Allison Enright

Consumer billing addresses and the location of consumer IP addresses are strong predictors of potential fraud, according to a new report, and addresses originating in Indonesia, Pakistan and Romania have the highest fraud activity levels. On the flip side, orders originating in Scandinavian countries, including Norway, Finland and Denmark, are among the lowest.

The findings appear in global payments processor and fraud prevention vendor 2Checkout.com Inc.’s Fraud Index Report and are based on 1 million payment transactions worldwide that were attempted in the first quarter. This is the inaugural edition of a quarterly report.

Online orders with Indonesian billing addresses are more than 12 times more likely to be fraudulent than the global average; orders with Pakistani addresses are five times more likely to be fraudulent; and orders with Romanian billing addresses are more than three times more likely to be fraudulent. 2Checkout does not disclose the global average fraud.

The study also looked at fraud rates through the lens of the payment type used on fraudulent orders. 2Checkout says payments made with Discover and Diners Club cards produce the highest fraud, followed by American Express and Visa. Consumers that use Discover and Diners Club to place online orders are 0.75% more likely to initiate a fraudulent transaction than the average buyer; American Express users are 0.43% more likely and Visa users are 0.27% more likely. MasterCard had the lowest fraud index of all credit cards examined, and is 0.21% less likely to be used for fraudulent transactions than the average buyer, according to 2Checkout data. 2Checkout says incidents of fraud for payments made via eBay Inc.’s PayPal service are even lower and are 0.50% less likely to be fraudulent. 

Order values of more than $400 have the most fraudulent activity. The lowest fraud rates are for orders of $30-$39, according to the 2Checkout index. The study also analyzed fraud rates for order values of $1-$9, $10-$19, $20-$29, $40-$49, $50-$75, $76-$99, $100-$199, $200-$299 and $300-$399.


2Checkout, e-commerce, e-payments, fraud, Fraud Index Report, payment type, Security