U.S. e-retailers block orders from Ghana, Nigeria

A report by US payment processor CyberSource Corp says as high as 76% and 58% of U.S. and Canadian merchants who accept international orders online shut off orders from Nigeria and Ghana respectively last year.

The motive is induced by fraud, particularly in international e-commerce, and other countries which suffered business blockades for 2008, included Pakistan (32%), Indonesia (23%), Singapore (19%), Romania (18%), China, Russia, and Vietnam with 13% each, and South Korea and Hong Kong with 10%.

“Growth rates beyond U.S. and Canadian borders remain considerably higher than here, so during difficult economic times, expanding international e-commerce is a logical move for many merchants,” says Doug Schwegman, CyberSource director of market and customer intelligence. “But overall rates of fraud require merchants to exercise great care in handling orders received.”

According to the survey, 52% of e-merchants accept orders from abroad, accounting for 17% of their total sales. But merchants report that 4% of international orders turn out to be fraudulent—3.6 times the domestic rate of 1.1%. The international fraud rate has increased 67% since 2005. CyberSource reports.

In 2008, merchants rejected 11% of international orders compared to 2.9% of orders from the U.S. and Canada.

The survey data also showed leading centers for e-commerce fraud in the U.S. 25% of respondents said New York presented the highest risk of fraud among cities in the U.S. and Canada. Miami was second at 21% and Los Angeles third at 9%.