Key takeaway: New merchants face a sharply elevated fraud risk in their first weeks on a platform. Processors and acquirers often rely on fraud models built around established merchants. That approach may leave their newest accounts underprotected at exactly the moment those accounts face the highest risk.
Fraudio published the analysis on October 14, 2026, drawing on more than 127.5 million transactions. It found that newly onboarded merchants face fraud fast. The median time from a merchant’s first transaction to its first fraud case is 33 days.
The analysis tracked 3,923 merchants whose first transaction fell in 2025, with no prior history in the dataset. Fraudio followed each merchant through its first 90 days. It found that 10.5% of these newly observed merchants experienced fraud in that window.
Fraud hit a quarter of affected merchants within nine days of their first transaction, and three quarters within 61 days. Twenty percent had their first fraud in week one, and 47% within the first 30 days.
Fraud rates per transaction ran 2.9 times higher in a merchant’s first 90 days. That compares with payment programs more than a year old.
Fraudio also found that 82% of fraudulent transactions looked ordinary by amount, currency, and payment channel. That figure nearly matches the 84% rate for legitimate transactions, suggesting transaction-level screening alone would miss most new-merchant fraud.
A stronger signal showed up elsewhere. Thirty percent of fraudulent transactions involved a card already linked to earlier fraud, versus 0.075% of legitimate transactions. Fraudio noted this is a retrospective measure. Chargebacks and similar after-the-fact signals sometimes confirm fraud labels well after the transaction occurs.
João Moura, Fraudio’s chief executive officer and co-founder, said: “Payment companies should not have to learn what fraud looks like by experiencing losses first. Fraud prevention needs to start with context from day one.”
Why it matters: The findings point to a gap in how processors and acquirers screen new merchant accounts. Fraud models trained on a platform’s established merchants tend to miss the patterns that show up fastest in brand-new accounts. That is exactly the window these findings flag as highest-risk.
Source: SecurityBrief US