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Online shopping and online fraud are to increase in equal measure during 2005, according to payment service CyberSource. It estimates that UK ecommerce revenues will grow by 36 per cent this year with 20m shoppers spending £17bn online. By 2009 as much as 25 per cent of UK shopping will be done via the internet.

However, with online revenue growing so fast, a steady rate of fraud will lead to ballooning losses for many businesses, especially those without automated card processing systems, CyberSource warns.

As Chip and PIN systems roll out in stores, lessening the risk of credit card present fraud, criminals are looking to exploit the success of the online market. A survey of etailers conducted by Retail Logic, a card processing firm, reveals that 56 per cent of UK respondents believe that online fraud will become more serious for them during 2005 as criminals become more sophisticated. Online retailers are currently refusing six per cent of their orders due to suspicions of fraud.

Mark Currie, marketing director at Retail Logic, said: "Only 28 per cent of merchants expect to be able to increase their manual review staffing levels in 2005. But sales are projected to grow to 36 per cent. This implies that most merchants will need to improve productivity to keep up with sales growth.

"Yet with each manual check requiring three minutes on average, they simply won’t be able to cope with demand. Therefore, automated systems are an obvious answer."

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