At A Glance
Trust remains the foundation of digital commerce, yet maintaining it is increasingly complex. Consumers expect strong protections online, but research indicates a gap between expectations and reality. Learn more in part one of a collaborative two-part series by Experian & Mastercard.Experian’s latest research shows that while 83% of U.S. consumers expect companies to address security and privacy concerns, branded retail sites have some of the widest trust gaps, more than a 30% difference between expectation and reality. This disconnect isn’t just theoretical; it drives real-world consequences like cart abandonment, dispute escalation and reputational damage.
Online fraud is amplifying this erosion of consumer confidence. Identity theft and stolen credit card information remain top concerns for consumers, and when those fears materialize, the impact can be significant. A Mastercard study found that 91% of consumers would consider not doing business with a company again after experiencing fraud. For merchants, this isn’t just a customer experience issue; it’s a financial and operational crisis. Two-thirds of merchants report year-over-year increases in fraud losses, with account takeover and transactional payment fraud topping their list of stressors. Every dispute becomes a trust event, and when trust is damaged, chargebacks rise, fees climb and merchants risk being classified as high-risk, a label that can increase transaction costs and damage long-term profitability.
“In today’s digital commerce landscape, trust isn’t just important. It’s the foundation of every successful interaction between consumers and merchants. As threats become increasingly sophisticated, it’s essential for businesses to make protecting consumer trust their top priority.”
Dennis Gamiello, Executive Vice President of Identity, Mastercard
One of the most visible symptoms of this trust gap is the surge in guest checkout. Consumers increasingly choose speed and privacy over account creation. 43% of consumers prefer guest checkouts, and 72% still use it even when they already have an account. While this behavior signals a desire for frictionless experiences with less data, it creates a challenge for merchants: fewer data insights make fraud harder to detect, so the most seamless checkouts aren’t always the most secure. Striking a balance between speed and security is key in today’s e-commerce landscape.
“When there’s limited context and no persistent relationship, trust has to be established in real time. That exposes the limits of static credentials. Identity intelligence must lead, continuously assessing who’s behind the interaction and whether they can be confidently authenticated before the transaction completes. Payment tokenization, biometric authentication and tools like Click to Pay also reduce manual entry of sensitive data and reinforce security and convenience.”
Dennis Gamiello, Executive Vice President of Identity, Mastercard
The solution isn’t to force account creation; it’s to rethink security. Consumers want protection they can trust, but don’t want those security methods to slow down their digital experiences. Invisible security measures, such as behavioral analytics and passive identity verification, enable merchants to secure transactions without slowing them down. Our recently released report shows that half of merchants now use secondary devices to verify identity, signaling a shift toward frictionless security. Behavioral biometrics rank among the most trusted authentication methods, yet adoption remains slow.
“Security today means investing in invisible tools consumers expect merchants to have, solutions that detect signals almost impossible to spoof. These capabilities are critical for addressing top concerns like identity theft and stolen credit card abuse. They allow merchants to protect trust without adding friction.”
Nash Ali, Vice President of Operational Strategy, Experian
What does that mean in practice? It means ensuring the purchaser truly owns the identity data and payment method they provide. Advanced fraud detection layers behavioral, device and network intelligence atop rich identity verification tools, like Mastercard’s Identity Insights via Experian’s orchestration platform, and payment ownership verification data to spot anomalies in real time, even at guest checkout.
“By analyzing interaction patterns such as typing cadence, hesitation, and copy-paste behavior, merchants can distinguish genuine users from bots or synthetic identities without collecting personal information. And with passive card verification, merchants can confirm card ownership instantly, reducing false declines and preventing fraud, all while preserving privacy and speed.”
Jose Pallares, Senior Director of Payments and E-commerce products, Experian
Building trust isn’t just meeting expectations; it’s anticipating threats and investing in technologies that make fraud detection seamless and invisible. For merchants, this isn’t only about reducing fraud; it’s about avoiding the downstream costs of disputes and chargebacks that erode margins and operational efficiency. First-party fraud is contributing to an increase in disputes, which can affect financial performance and customer trust.
As we move into part two, we’ll explore why these challenges are escalating, how they impact merchant profitability, and what proactive strategies, from dispute intelligence to enhancing transaction clarity, can help businesses fight back and protect trust at scale.
Coming soon: Part two: Fighting back against first-party fraud – from chargebacks to checkout safeguards