47% of merchants report false rejections resulting in lost sales

This is the central theme of the December edition of the Payment Orchestration Tracker series, “Orchestrating Trust: The Future of Payment Fraud Prevention.” The report believes that as digital commerce becomes more complex, fraud becomes more coordinated and adaptive.

Static rules engines and standalone machine learning tools are no longer enough. Instead, merchants and financial institutions are turning to fraud orchestration, which is described as a command and control layer that connects multiple risk tools, identity systems, and payment gateways into a single decision-making framework. The goal is not only to reduce fraud losses, but also to protect revenue by minimizing false rejections and checkout friction.

The report highlights several data points that underline this shift:

• 85% of merchants say their biggest fraud challenge is preventing fraud without degrading the customer experience.
• 53% of U.S. financial institutions already use fraud orchestration, with another 16% currently implementing it and 26% planning to adopt it.
• 51% of global e-commerce merchants expect fraud management staff costs to remain the same or decrease, although 63% plan to increase investment in fraud technology.

The figures reveal broader structural changes. Fraud management is moving from labor-intensive review processes to automated, real-time systems that can assess identities, device data, transaction history and behavioral signals in milliseconds.

The report doesn’t just define orchestration. It sees it as a response to deeper tensions in the payments space. For merchants, authorization rates, checkout speed, and conversion metrics are just as important as loss prevention. Nearly half of merchants estimate that up to 5% of legitimate orders are incorrectly rejected as fraud, representing an estimated $50 billion in lost revenue across the industry. A fraud system that is too blunt can also create its own financial risks.

Orchestration aims to resolve this tension by intelligently sequencing tools. Rather than running every transaction through every check, the platform determines when increased scrutiny is needed and when it is not. Trustworthy customers flow through streamlined processes. Suspicious patterns trigger layered defenses such as behavioral biometrics, device fingerprinting, or additional authentication.

Another important insight is the connection between fraud tactics and payment routing. The report highlights that fraud control and payments optimization are intertwined. Vulnerabilities in fraud systems may increase the likelihood of false rejections. Poor routing decisions can increase risk. By integrating fraud orchestration into an open payments platform, merchants can coordinate risk checks and authorization strategies simultaneously.

The document also emphasizes operational efficiency. Many merchants manage five or more payment integrations, as well as multiple fraud vendors. Fragmentation creates blind spots and increases costs. Centralized orchestration relieves the burden of managing disparate systems, allows for A/B testing of fraud tools, and enables faster iteration when fraud patterns change.

Importantly, fraud orchestration does not end at the moment of authorization. The report outlines a lifecycle approach covering onboarding, account changes, transaction monitoring and post-purchase disputes. Fraudsters exploit gaps between pipelines and stages. The unified system provides cross-pathway visibility and centralized case management.

The underlying message is that fraud has become too dynamic to be defended in isolation. As instant payments, embedded commerce and digital wallets compress decision windows, organizations need adaptive systems that can learn and adapt on the fly. Fraud orchestration is positioned not as a new tool, but as an architectural layer that brings consistency to an increasingly complex ecosystem.

For payments leaders, the implications are clear. Trust is no longer maintained through isolated controls. It's sustained by orchestrating intelligence to protect revenue while preserving customer experience.

At PYMNTS Intelligence, we work with businesses to uncover insights and drive intelligent, data-driven discussions about changing customer expectations, a more connected economy, and the strategic shifts needed to deliver results. With rigorous research methods and an unwavering commitment to objective quality, we deliver data you can trust to grow your business. As our partner, you'll have access to our diverse team of PhDs, researchers, data analysts, digital numerators, subject matter veterans, and editorial experts.