Half of merchants shift fraud spend from people to technology
Merchants are finding that fraud prevention is less about stopping bad actors at checkout and more about managing risk throughout the entire payment process, from account creation to post-transaction disputes.
This shift is at the heart of new insights from PYMNTS Intelligence's report titled “Orchestrating Trust: The Future of Payments Fraud Prevention,” which argues that in a payments environment defined by speed, scale and evolving attack methods, fragmented defenses are no longer sufficient.
The report found that fraud schemes are emerging as a structural response to this new reality. Rather than relying on siled tools or teams, orchestration acts as a command and control layer, coordinating identity checks, behavioral signals, machine learning models, and payment routing in real time.
The goal of these campaigns is not just to stop fraud, but to protect both revenue and customer trust. The report concludes that as digital payments become increasingly complex, fraud prevention has become inextricably linked to payments optimization and customer experience.
Three data points from the report illustrate why this approach is growing in popularity:
- 85% of merchants say their biggest fraud challenge is reducing friction for legitimate customers while still stopping fraud. This highlights that even if fraud losses are contained, blunt controls can undermine conversions.
- 53% of U.S. financial institutions already use a fraud orchestration solution or expect to adopt one soon, indicating that orchestration is moving from early adoption to a mainstream strategy.
- 51% of global e-commerce merchants expect spending on fraud managers to remain the same or decline even as threats increase, highlighting the need for automated and orchestrated systems rather than larger teams.
Beyond these headline figures, the report paints a broader picture of how fraud is changing. Fraudsters are now deploying multiple tactics simultaneously, including bots, account takeovers, synthetic identities, and friendly fraud, and they are rapidly changing their methods as defenses adapt.
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Static rules engines capture known patterns but struggle with new patterns. Machine learning models improve detection, but require context from identity and behavioral data to be effective. Orchestration integrates these signals so that decisions can evolve as fast as the threat.
The report also highlights that false rejections have become a hidden cost of fragmented fraud strategies. Nearly half of merchants estimate that up to 5% of legitimate orders are incorrectly declined, costing the industry tens of billions of dollars in lost revenue.
Orchestration solves this problem by intelligently sequencing checks, applying stronger controls only when the risk justifies it, and allowing trustworthy customers to complete checkout with minimal friction. This approach redefines fraud prevention from a defensive cost center to a contributor to growth.
Another finding is that fraud orchestration increasingly belongs to open payments platforms rather than as a separate layer. When fraud decisions and payment routing are aligned, merchants can optimize authorization rates while maintaining protection. The report believes this end-to-end view is particularly important as instant payments and embedded commerce compress decision windows into milliseconds.
Finally, the report emphasizes that fraud planning does not end with authorization. Effective strategies cover onboarding, account changes, transaction monitoring and dispute management.
By unifying these stages, merchants can gain cross-channel visibility and reduce operational overhead at a time when staffing budgets are under pressure. Fraud moves too fast for point solutions. Orchestration provides a way to keep up.
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.
