Artificial Intelligence (AI)-Powered Digital Commerce Fraud Shield Market Report 2025

The artificial intelligence (AI)-powered digital commerce fraud shield market size has grown exponentially in recent years. It will grow from $6.84 billion in 2024 to $8.51 billion in 2025 at a compound annual growth rate (CAGR) of 24.3%. The growth observed during the historic period was driven by the rise in online transactions, heightened awareness of transaction security, increasing demand for identity verification in financial services, greater emphasis on reducing chargebacks, and growing consumer preference for digital payment methods.

The artificial intelligence (AI)-powered digital commerce fraud shield market size is expected to see exponential growth in the next few years. It will grow to $20.04 billion in 2029 at a compound annual growth rate (CAGR) of 23.9%. The projected growth during the forecast period is driven by the rising demand for real-time transaction monitoring, the expansion of online retail platforms, increased focus on customer trust and loyalty, greater need for secure high-value transactions, and growing attention to securing omni-channel transactions. Key trends expected in this period include advancements in multi-layered security frameworks, innovations in integrated fraud detection models, improvements in identity verification workflows, adoption of geolocation-based security protocols, and development of advanced fraud risk scoring models.

The expanding adoption of e-commerce platforms is expected to boost the AI-powered digital commerce fraud shield market in the coming years. E-commerce platforms are online marketplaces and retail websites that facilitate the buying and selling of products and services over the internet. Their growth is largely fueled by increasing internet penetration, allowing more consumers to access online stores, compare products, and make purchases conveniently from anywhere. AI-powered digital commerce fraud shields assist these platforms by detecting and preventing fraudulent transactions in real time, protecting customer trust, minimizing financial losses, and ensuring a secure and seamless shopping experience. For example, according to the U.S. Census Bureau, U.S. retail e-commerce sales reached $292.9 billion in the second quarter of 2025, marking a 6.2% increase from the first quarter. Compared to the second quarter of 2024, e-commerce grew by 5.3%, while overall retail sales rose by 3.8% over the same period. This surge in e-commerce platform adoption is therefore driving the growth of the AI-powered digital commerce fraud shield market.

Key players in the AI-powered digital commerce fraud shield market are developing advanced solutions, including AI-driven fraud prevention systems, to identify and prevent fraudulent transactions in real time. These systems use artificial intelligence to analyze transactions, detect suspicious patterns, and prevent fraud, reducing financial losses, minimizing false declines, and strengthening customer trust in online shopping. For example, in March 2025, U.S.-based Riskified Ltd., a provider of e-commerce fraud and risk intelligence solutions, launched Adaptive Checkout, an AI-powered fraud prevention tool designed to optimize e-commerce conversion rates by tailoring each checkout flow based on the transaction’s risk profile and shopper history. The system applies selective verification steps, such as CVV, OTP, or 3DS, only for higher-risk orders while allowing low-risk customers to complete purchases seamlessly. This approach enables merchants to approve more legitimate transactions, effectively block fraud, and increase revenue, as demonstrated by clients such as TickPick. Adaptive Checkout effectively balances fraud prevention with maximizing approvals, supporting e-commerce growth.

In January 2025, U.S.-based software firm Chainalysis Inc. acquired Alterya Ltd. for around $150 million. This acquisition enables Chainalysis to leverage Alterya’s AI-driven fraud detection technology to provide comprehensive, real-time fraud protection for both cryptocurrency and traditional payment systems, enhance KYC and compliance processes for exchanges and wallet providers, reduce losses from scams, and strengthen its capability to detect and prevent fraud at scale. Alterya Ltd., headquartered in Israel, specializes in AI-powered fraud detection solutions for the fintech and cybersecurity industries.

Major players in the artificial intelligence (ai)-powered digital commerce fraud shield market are Stripe Inc., LexisNexis Risk Solutions, ACI Worldwide Inc., Fair Isaac Corporation, CyberSource Corporation, Riskified Ltd., Accertify Inc., Forter Ltd., Feedzai Inc., Signifyd Inc., ClearSale S.A., Kount Inc., DataDome Group Inc., Ravelin Technology Ltd., Arkose Labs Inc., SymphonyAI, DataVisor Inc., Featurespace Ltd., Sift Science Inc., NoFraud LLC.

North America was the largest region in the artificial intelligence (AI)-powered digital commerce fraud shield market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in artificial intelligence (AI)-powered digital commerce fraud shield report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the artificial intelligence (AI)-powered digital commerce fraud shield market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.

An AI-powered digital commerce fraud shield is a technology solution that uses artificial intelligence algorithms to detect, prevent, and mitigate fraudulent activities in online transactions. It analyzes transaction patterns, identifies anomalies, and flags suspicious behavior in real time, reducing financial risks while continuously learning from new data to improve accuracy and adapt to evolving fraud tactics.

The core components of AI-powered digital commerce fraud shields include software and services. The software comprises digital tools and applications that perform automated tasks, process data, and streamline operations across computing systems. These solutions can be deployed on-premises or via the cloud and serve businesses of varying sizes, including small and medium enterprises (SMEs) and large enterprises. They are applied in areas such as payment fraud detection, account takeover prevention, identity verification, and chargeback mitigation, and are utilized by industries including e-commerce, retail, banking, financial services, insurance (BFSI), travel, and hospitality.

The artificial intelligence (AI)-powered digital commerce fraud shield market research report is one of a series of new reports that provides artificial intelligence (AI)-powered digital commerce fraud shield market statistics, including artificial intelligence (AI)-powered digital commerce fraud shield industry global market size, regional shares, competitors with the artificial intelligence (AI)-powered digital commerce fraud shield market share, artificial intelligence (AI)-powered digital commerce fraud shield market segments, market trends, and opportunities, and any further data you may need to thrive in the artificial intelligence (AI)-powered digital commerce fraud shield industry. This artificial intelligence (AI)-powered digital commerce fraud shield market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The artificial intelligence (AI)-powered digital commerce fraud shield market consists of revenues earned by entities by providing services such as compliance support for fraud-related regulations, machine learning model training and customization, fraud consulting and strategy advisory, behavioral analytics and anomaly detection, threat intelligence and reporting services. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (AI)-powered digital commerce fraud shield market also includes sales of rule-based fraud detection engines, transaction risk management tools, cloud-based fraud analytics dashboards, behavioral biometrics software, bot detection and mitigation tools. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

This product will be delivered within 3-5 business days.