In the Age of AI, Trust is an E-Commerce Merchant’s Most Valuable Asset

New research suggests that e-commerce fraud rates will increase dramatically over the next several years, growing 141 percent between today and 2029. One new driving force is Fraud-as-a-Service (FaaS), a rapidly growing business model in the cybercrime underworld where sophisticated hackers develop, sell or rent ready-made tools, infrastructure and expertise to novice attackers.

This essentially democratizes cybercrime, equipping inexperienced criminals to perform high-level, complex attacks, including account takeovers, payment scams, and chargeback abuse. Not surprisingly, e-commerce platforms are a top target for these threats, putting them at huge risk for financial losses as well as eroded brand reputation and customer trust. Today’s consumers increasingly expect all the online platforms they engage with, including e-commerce, to be safe and secure. That’s why in today’s artificial intelligence age, trust has become an e-commerce merchant’s most valuable asset.

Accelerating Fraud Risk

E-commerce platforms are particularly vulnerable to fraud because many merchants lack the protections found in more regulated industries like financial services. In fact, the e-commerce industry is 18 times more likely to suffer at the hands of authorized fraud scams than the global average.

Unfortunately, emerging AI technology has only accelerated these risks. Complex scams that may have taken months to develop in the past can now be generated in a few days or even hours with the help of AI. Below are a few of the key ways that AI is evolving how hackers attack:

• Phishing: Hackers often write communications that look like they’re from a trusted retailer, which can be used to steal sensitive information from shoppers. In the past, this may have taken days to analyze a single company’s language, study its web design, and write realistic communications. However, with the help of AI, hackers can generate emails, chat messages, or even entire websites in a short period of time. This means that they can scale their scams more quickly than ever. Furthermore, deepfake audio and video allow scammers to impersonate company representatives without exposing their own identities.
• Automated Attacks: Scammers can use AI to try millions of stolen username/password pairs, probe checkout flows for weaknesses, and more. With this technology, hackers are much faster and more efficient than a human ever could be.
• Account Takeover: AI can also be used by fraudsters to impersonate real shoppers. By mimicking photos or voice audio, fraudsters can gain access to their accounts and place fraudulent orders or steal sensitive information.
• Synthetic Identity Fraud: Fraudsters also have generated realistic, AI-fabricated identities (e.g., fake names, addresses, credit profiles, even deep-faked selfies) to open new accounts, exploit promotions, and more without ever having to expose their real identities.
• Return and Refund Fraud: AI tools can help create fake receipts, shipping labels, or product images to trick automated return systems into issuing refunds or credits without legitimate returns.

These are just a few of the many ways that AI has helped fraudsters level up their strategies. Perhaps even more frightening: much of this technology is still in its infancy, and hackers will continue to find new ways to advance their scams as AI evolves.

Protecting Customers and Building Trust

The risks inherent in e-commerce platforms haven't been lost on consumers. One recent survey found that 43 percent of shoppers don’t think e-commerce platforms are sufficiently securing users against fraud. It’s no longer enough to have great products. To motivate consumers to shop, merchants must now prove that they take privacy and security seriously.

So, how can merchants build trust in the age of AI?

The solution is two-pronged. First, merchants must change their mindsets. Any storefront that handles and stores sensitive information like credit card numbers must operate as if it were a financial institution (when it comes to security). That means at every stage of the business — from checkout flows to account management — merchants should be thinking proactively: How could a hacker exploit this? And what steps can we take to tighten security measures?

Second, e-commerce storefronts should implement robust cybersecurity technologies. Identity verification technology, for one, helps confirm that a shopper is who they say they are before a transaction is ever completed. Not only can this prevent unauthorized purchases and account takeovers, but it also reassures customers that their sensitive information is being handled securely. Indeed, consumers now view security measures like identity verification and biometrics as equally important on e-commerce marketplaces (96 percent) as they are on financial services sites (97 percent). When combined with other tech tools like two-factor authentication, real-time transaction monitoring, and AI-driven fraud detection, identity verification can help merchants stay one step ahead of scammers while also building trust with shoppers.

Conclusion

As AI continues to transform how hackers attack, merchants cannot afford to be soft on security. Trust is now a critically valuable asset. Those that fail to prioritize security risk losing not just revenue, but customer confidence.

Those who choose to be proactive by shifting their mindsets and investing in advanced security technologies can turn trust into their competitive advantage.

Iryna Bondar-Mucci is fraud prevention platform lead at Veriff, global AI identity verification and KYC solutions.