More Than Half of Merchants Shift Fraud Spend From People to Tech

Merchants are discovering that fraud prevention has become less about stopping bad actors at checkout and more about managing risk across the entire payment journey, from account creation to post-transaction disputes.

That shift is the central new insight of the PYMNTS Intelligence report titled “Orchestrating Trust: The Future of Fraud Prevention in Payments,” which argues that fragmented defenses are no longer sufficient in a payments environment defined by speed, scale and constantly evolving attack methods.

The report finds that fraud orchestration is emerging as a structural response to this new reality. Rather than relying on isolated tools or teams, orchestration functions as a command-and-control layer that coordinates identity checks, behavioral signals, machine learning models and payment routing in real time.

The goal of these activities is not simply to block fraud, but to protect revenue and customer trust at the same time. As digital payments grow more complex, the report concludes, fraud prevention has become inseparable from payment optimization and customer experience.

Three data points from the report illustrate why this approach is gaining traction:

85% of merchants say their biggest fraud challenge is reducing friction for legitimate customers while still stopping fraud. This highlights how blunt controls can undermine conversion even when fraud losses are contained.

53% of U.S. financial institutions already use a fraud orchestration solution or expect to adopt one soon, signaling that orchestration is moving from early adoption to mainstream strategy.

51% of global eCommerce merchants expect spending on fraud management staff to remain flat or decline, even as threats increase, underscoring the need for automation and coordinated systems rather than larger teams.

Beyond these headline figures, the report paints a broader picture of how fraud has changed. Fraudsters now deploy multiple tactics at once, including bots, account takeovers, synthetic identities and friendly fraud, and they shift methods quickly when defenses adapt.

Static rules engines catch known patterns but struggle with new ones. Machine learning models improve detection but require context from identity and behavioral data to be effective. Orchestration brings these signals together so decisions can evolve as fast as the threats.

The report also emphasizes that false declines have become a hidden cost of fragmented fraud strategies. Nearly half of merchants estimate that up to 5% of legitimate orders are wrongly declined, translating into tens of billions of dollars in lost revenue industrywide.

Orchestration addresses this by sequencing checks intelligently, applying stronger controls only when risk justifies them and allowing trusted customers to move through checkout with minimal friction. This approach reframes fraud prevention from a defensive cost center into a contributor to growth.

Another finding is that fraud orchestration increasingly belongs inside open payments platforms rather than as a standalone layer. When fraud decisioning and payment routing are coordinated, merchants can optimize authorization rates while maintaining protection. The report argues that this end-to-end view is especially important as instant payments and embedded commerce compress decision windows to milliseconds.

Finally, the report stresses that fraud orchestration does not end with authorization. Effective strategies extend across onboarding, account changes, transaction monitoring and dispute management.

By unifying these stages, merchants gain visibility across channels and reduce operational overhead at a time when staffing budgets are under pressure. Fraud is evolving too quickly for single-point solutions. Orchestration offers a way to keep pace.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data 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.