47% of merchants say false rejections caused their sales to drop
Merchants discovering fraud is no longer a problem they can solve just at checkout. This is a systemic challenge that occurs at every step of the payments process, from onboarding to post-transaction disputes.
That’s the core message of PYMNTS Intelligence’s latest payments orchestration tracker, “Orchestrated Trust: The Future of Payment Fraud Prevention.” The report believes that fraud orchestration has become the connectivity layer that orchestrates security, customer experience and revenue protection in an increasingly complex payments environment.
Trackers are finding that preventing fraud has become more difficult, not because merchants lack tools but because they have too many. Digital commerce now spans cards, wallets, instant payments and embedded processes, each with its own risk signals and attack surfaces. Fraudsters exploit vulnerabilities between these systems and change tactics once defenses are tightened. Static rules can capture familiar patterns but have difficulty adapting to new patterns. Machine learning tools will flag anomalies, but context is still needed. Orchestration integrates these disparate elements into a decision-making layer that can adapt in real time.
The report does not view fraud as a decision to stop or continue at the time of authorization, but rather as an ongoing process. Risks arise before a trade is made and may persist long after the trade has cleared. Orchestration enables merchants to apply the right level of scrutiny at the right time, reducing unnecessary friction for trusted customers while increasing controls when risk rises. The goal is not just to reduce fraud losses, but to enhance trust throughout the payment process.
Three data points underscore the importance of this shift:
- 85% of merchants say their biggest fraud challenge is reducing friction for legitimate customers while still preventing fraud. Security itself is no longer a measure of success.
- 47% of merchants estimate that up to 5% of legitimate orders are incorrectly rejected as fraudulent, resulting in an estimated $50 billion in lost revenue across the industry.
- Fifty-three percent of U.S. financial institutions already use a fraud orchestration solution, with another 16% actively implementing it and 26% planning to adopt it, indicating that orchestration is becoming mainstream.
In addition to these key findings, the report highlights how fraud orchestration is reshaping operational strategies. Many merchants now manage five or more payment integrations. Every additional tool adds cost, complexity, and potential points of failure. Orchestration reduces redundancy by intelligently sequencing risk checks, much like an air traffic controller directing aircraft. Trustworthy customers get through smoothly with minimal friction. Suspicious activity triggers deeper verification. Operations teams gain centralized visibility instead of juggling disconnected dashboards.
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The tracker also links fraud orchestration to broader cost pressures. While 63% of merchants plan to increase spending on fraud technology, more than half expect staff budgets to remain the same or decrease. Orchestration supports this shift by automating decisions, reducing manual reviews, and enabling rapid testing of new tools without heavy engineering work. Fraud management becomes more scalable and less dependent on human intervention.
Crucially, the report highlights that orchestration does not end once a deal is approved. Modern fraud strategies span onboarding, account changes, transaction monitoring and dispute management. Integrating fraud orchestration into open payments platforms allows merchants to integrate risk decisions with routing and authorization strategies to protect approval rates and customer experience.
Fraud evolves too quickly for isolated defenses. Coordination is now the differentiator. For merchants and financial institutions, orchestration is becoming the foundation of trust in digital payments.
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, number crunchers, subject matter veterans, and editorial experts.
