The hidden cost of the cost-of-living crisis

Everywhere you look right now, the same pressure shows up in different ways. Groceries cost more, shipping costs more, insurance costs, utilities cost more. 

But one of the fastest growing costs in ecommerce is almost invisible to consumers - fraud. Not just the headline grabbing kind, but every day, background, operational costs of selling online. And the uncomfortable truth is this: consumers are already paying for it.

The myth that online retail is cheaper

From the outside, ecommerce looks efficient. Merchants don’t have shop rent, fewer staff are needed, and there are no physical tills. So theoretically, prices should be lower.

But inside a retail business the equation looks very different. Online transactions introduce costs that physical stores do not face at the same scale:

• Higher payment processing fees

• Increased chargebacks

• Manual reviews

• Customer disputes

• Account takeover protection

• Fraud tools and monitoring teams

• Lost goods and reshipping

• Reputation damage\

  
  

And most importantly, physical stores have very low instances of transactions that should never have happened. This is because card-not-present payments are fundamentally riskier than card present (in-person) transactions. 

So, while ecommerce may remove rent and some overheads, it replaces these with risk infrastructure. For many merchants that risk sits quietly inside pricing models and margin assumptions.

Fraud is not stabilising. It is accelerating

• 66% of retailers report year on year fraud growth. 

• eCommerce fraud is exploding. Businesses lost $44.3 billion in 2024, and by 2029, that number is expected to skyrocket to $107 billion, with card-not-present fraud losses are projected to reach over $28 billion by 2026. 

• Ecommerce fraud pressure increased by 13% in 2025. 

  
  

This is not a marginal problem because fraud does not only cost the value of the product. Each fraudulent order often costs several times the original transaction once fees, handling and dispute processing are included. And those losses do not stay contained.

Consumers ultimately carry the bill

Banks may refund customers, networks may absorb some disputes and retailers may write off inventory. This higher operational risk translates to higher prices, tighter returns policies, and more friction at checkouts. Fraud becomes a shared tax for legitimate shoppers.

When we talk about the cost-of-living crisis, we tend to focus on inflation, supply chains or interest rates. Yet absorbed into part of the price of everyday goods is the cost of covering transactions that should never have existed.

The question that changes everything

What would happen if online fraud largely disappeared?

Retailers would not need to build loss buffers into margins, which means risk teams would shrink, operational overheads would fall, and pricing pressure could ease.

In a market where consumers can compare prices in seconds, excess margin doesn’t last. Cost reductions are competed away, passed on through lower prices, better offers, or improved customer experience.

That means removing fraud isn’t just a gain for retailers. It is a direct reduction in the price consumers pay. At scale, even a few percentage points across ecommerce pricing would represent one of the rare structural reductions in consumer cost, not just another temporary discount.

Cost of living conversations rarely include payment architecture, yet it directly influences the price of almost everything bought online.

Where payment design matters

Online payments rely on a sequence of decisions. A transaction appears, is analysed, and is either approved or declined. If fraud is discovered later, the process shifts into chargebacks and recovery.

This model doesn’t prevent fraud; it manages it after the fact. Fraud is treated as a cost to be absorbed and recovered.

But what if the payment itself could not be fraudulent?

That is the shift CPoI® represents. Not another layer of fraud tooling, but a redesign of how a transaction proves legitimacy before it happens. By bringing card present authentication into online channels, it changes the point at which trust is established.

The result is not just better fraud detection, but a reduction in the need for fraud detection to exist at all, allowing risk buffers to be removed from margins and, ultimately, reducing the cost carried by consumers.

A cost we forget to question

The cost-of-living crisis is usually framed as a macroeconomic problem. But sometimes systemic cost increases come from design choices that became normal.

Online commerce assumed fraud would exist, so fraud detection has been engineered around it, and priced accordingly. The more digital commerce grows, the more that assumption matters. 

The question CPoI® enables us to ask is “what changes when fraud is no longer a built-in cost of selling online?”

Because among all the inputs that shape retail pricing, fraud is a structural cost of transaction design, not of producing or delivering the product.