Fraudio Exposes 25 Percent Surge in Coordinated Payment Fraud Networks

Why It Matters

Rising coordinated fraud erodes merchant revenue and customer trust, forcing issuers and platforms to adopt AI‑driven, infrastructure‑aware defenses. Ignoring the trend will increase chargebacks and operational costs across the digital payments ecosystem.

Key Takeaways

• Fraud rates rose 25% to 0.045% in 2025‑26.
• 91% of fraud tied to shared IPs; 99% at node level.
• Submerchant transactions face 4.9× higher fraud than direct merchants.
• False‑positive declines jumped to 23.5%, hurting legitimate customers.

Pulse Analysis

Online payment fraud has moved from opportunistic card theft to a structured, industrial‑scale operation. Fraudio’s data, presented at Money20/20 Europe, shows the average fraud rate climbing from 0.036 % in 2024 to 0.045 % for 2025‑26 – a 25 % jump. More than 91 % of incidents are linked to shared technical infrastructure, defined as a single IP serving 25 + cards, and at the node level these IPs account for 98.6 % of all fraud. The concentration of attacks in these high‑volume digital hubs gives criminals a stealthy, reusable foothold across merchants.

The study also highlights the hidden danger of submerchant models. Transactions routed through sub‑merchant accounts experience a fraud rate of 0.018 %, nearly five times the 0.004 % seen with direct merchants. Even robust authentication such as 3D Secure offers limited relief – fraud persists at 0.218 % despite successful 3DS verification, indicating sophisticated session hijacking. Meanwhile, false‑positive declines have surged to 23.5 % of all declines, eroding approval rates and alienating legitimate shoppers, especially in high‑velocity e‑commerce and MOTO channels.

For issuers, acquirers, and platform providers, the findings signal a shift from rule‑based checks to AI‑driven, infrastructure‑aware defenses. Real‑time mapping of IP clusters, cross‑merchant behavior analytics, and adaptive risk scoring can isolate coordinated networks before they generate chargebacks. Reducing unnecessary declines while tightening fraud nets protects revenue and customer trust. As digital marketplaces continue to expand, firms that invest in shared‑infrastructure detection and precise, low‑friction authentication will gain a competitive edge in an increasingly hostile payment ecosystem.