E-commerce fraud losses will total $2.8 billion this year, an 8 percent year-over-year increase, to the 7th Annual CyberSource fraud survey, reports InternetRetailer. Though the overall fraud loss rate remains relatively constant at 1.6 percent of revenue, those for midsize merchants (annual sales of $5-$25 million) is expected to increase to 1.8 percent of revenue from 1.5 percent in 2004.

International commerce poses the highest risk, with order rejection and fraud rates about three times higher than the overall rate. Larger merchants continue to rely on time-consuming, labor-intensive manual review, which can't cope with the increases in order volume.