Recent Q2 2026 benchmark data reveals a troubling trend: while fraud attack volumes are declining, chargeback costs are rising. This shift from volume to precision attacks requires a reevaluation of your fraud prevention strategies, including thresholds, authentication, and success metrics.
Fraud managers are grappling with this paradox: fewer attacks and a lighter review workload, yet an increase in disputes that outpaces block rates.
Why Are Chargebacks Rising Despite Stable Fraud Block Rates?
Your block rate captures fraud at the transaction level, but chargebacks appear weeks later when customers dispute unauthorized charges. This delay creates a blind spot.
In Q2 2026, fraudulent chargebacks surged 75.6% to 0.18%, up from 0.10% in Q1, while the fraud bypass rate remained at 2.8%. Attackers are targeting established accounts with a history of legitimate transactions. These transactions mimic genuine behavior and evade detection, only surfacing as chargebacks later.
If you're focusing solely on block rates, you're missing the bigger picture. Track the ratio of chargebacks to bypassed fraud. A rising ratio indicates attackers are succeeding with high-value transactions that take longer to detect.
Should We Be Concerned About a Drop in Manual Review Rates?
A drop in manual review rates, from 2.4% in Q1 to 2.1% in Q2, can be positive if it's due to improved automation. However, if it's because thresholds were loosened to approve more transactions, it could lead to more disputes.
Check if chargebacks remained stable or declined alongside the drop in manual reviews. If chargebacks increased, some efficiency gains might be from approving riskier transactions. Review your threshold logic, especially for high-value transactions and accounts with stored credentials, where precision attacks are more likely.
Should Digital Commerce Be Concerned About Trends in Internet and Software?
Yes, because successful attack patterns often migrate across industries. The fraud attack rate in Internet and Software rose to 3.8% in Q2 from 2.72% in Q1, driven by subscription models that allow recurring theft.
Digital Commerce saw a drop in fraud rates to 1.5% from 1.7%, but the subscription attack pattern is relevant if you store payment methods for repeat purchases. Attackers maintain access and extract value over time, making detection harder.
Monitor vertical-specific data to understand where attackers are focusing. As defenses improve in one area, attackers shift to softer targets. If Internet and Software strengthens controls, expect similar tactics in Digital Commerce.
What's the Right Multi-Factor Authentication (MFA) Adoption Rate for Our Vertical?
Finance and Fintech have an 11.5% Multi-Factor Authentication (MFA) adoption rate in Q2, while Digital Commerce lags at 1.8%. Improving authentication in Digital Commerce could significantly reduce fraud, as attackers face less friction there.
The right Multi-Factor Authentication (MFA) rate isn't a fixed number. It's the rate that makes account takeover attempts uneconomical for attackers targeting your customers. Start with Multi-Factor Authentication for high-value accounts and transactions above your average dispute cost. Expand based on actual attack patterns in your environment.
How Do We Recalibrate Thresholds Amid Shifting Attack Patterns?
Recalibration involves separating metrics into transaction-level (block rate, manual review rate, bypass rate) and outcome-level (chargebacks, dispute resolution time, customer churn post-fraud). If transaction-level metrics improve but outcome-level metrics worsen, your thresholds are outdated.
Create a feedback loop to track dispute origins. Identify which rule set transactions passed through and what signals were present at authorization. If disputes cluster around specific transaction types, those thresholds need tightening.
The overall chargeback rate rose 19% to 0.31% from 0.26% in Q1, but this hides vertical-specific patterns. Tighten thresholds where disputes concentrate, not across the board, to avoid hurting approval rates without addressing the attack vector.
Where Should We Focus Heading Into Q3?
Focus on three areas:
Rising chargebacks indicate successful monetization despite lower attack volumes. Review your chargeback-to-bypass ratio and investigate transactions that cleared rules but generated disputes within 30 days.
Vertical-specific accelerations, like in Internet and Software, suggest attackers may test similar tactics in your environment. Strengthen controls around recurring payments and high-value transactions.
Manual review efficiency is reducing analyst workload, which is beneficial only if automation keeps pace with evolving threats. Audit recent threshold changes to ensure declining review volumes aren't masking rising risks.
Where to Go for More
The full Q2 2026 FIBR data provides detailed insights into fraud rates, chargeback trends, and authentication adoption by vertical. Use it to benchmark your performance against peers. Benchmarks are starting points for investigation, not conclusions. A fraud rate below industry average can still mean unacceptable losses if your margin structure can't absorb dispute costs.
Start with your chargeback trend. If it's rising faster than your block rate is improving, recalibrate your thresholds now.
