U.S. Fraud Detection Software Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)
This Report Provides In-Depth Analysis of the U.S. Fraud Detection Software Market Report Prepared by P&S Intelligence, Segmented by Component (Software, Services), Deployment (On-Premises, Cloud-Based), Organization Size (Large Enterprises, Small and Medium-Sized Enterprises), Application (Payment Fraud Detection, Identity Theft Prevention, Insurance Fraud Detection, Account Takeover Detection, Cybersecurity and Data Breaches Prevention), Industry (Banking, Financial Services, and Insurance, Retail and E-commerce, Government and Public Sector, Healthcare, Telecommunication, IT and Telecommunications, Industrial and Manufacturing, Travel & Transportation, Real Estate), and Geographical Outlook for the Period of 2019 to 2032
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U.S. Fraud Detection Software Market Analysis
The U.S. fraud detection software market was valued at USD 6.6 billion in 2024, which is expected to reach USD 23.9 billion by 2032, growing at a CAGR of 17.6% during the forecast period (2025–2032). This is because of the evolving nature of fraud, the increasing degree of digitization, and stringent regulatory requirements.
The rising use of digital transactions across the country is driving the frequency and severity of fraud. The rapid growth in the number of cyberattacks, identity thefts, and payment frauds necessitates stronger protective measures. The use of online shopping and digital wallets creates more chances for fraudsters to take advantage of system weaknesses, which threatens both customers and enterprises.
Advanced AI, ML, and behavioral analytics help companies fight fraud. These tools enable precise fraud detection through pattern analysis, unusual activity detection, and future fraud prediction beyond human capabilities. GDPR and PCI DSS regulations force businesses to implement robust fraud prevention solutions to protect customer data and prevent costly fines.
U.S. Fraud Detection Software Market Emerging Trends & Growth Drivers
Behavioral Analytics Is Trending
Fraud prevention tools now use behavioral analysis techniques to monitor the typical transaction patterns of users. Fraud detection tools identify unusual behavior by analyzing normal transaction patterns of users. When somebody performs an atypical large purchase that differs from their typical buying habits, these tools generate a suspicious activity alert. These systems conduct behavioral analyses of spending patterns’ location data and login activity to identify irregular activity that deviates from user behavior norms. The system detects fraud early to stop unauthorized transactions while safeguarding customer funds from loss without affecting normal, legitimate transactions.
Increase in Digital Transactions and Growth in E-Commerce Drive Market
Online shopping, mobile wallets, and digital payment systems have become mainstream due to increasing internet adoption and preference for added convenience. Americans bought goods worth USD 308.9 billion online in the fourth quarter of 2024, and this value was 2.7% more than the third quarter. These technologies enable users to order groceries and pay for various services through mobile devices and PoS taps, making transactions quicker and simpler. However, the increasing adoption of digital payments by consumers generates new vulnerabilities, which attract fraudsters. These systems experience constant exploitation by hackers, scammers, and other cybercriminals, endangering personal and financial data security.
Businesses are implementing fraud prevention solutions because of increasing criminal activity, which threatens both their customer base and financial stability. Online companies must invest in fraud detection tools because these systems provide the necessary protection against stolen credit cards, fake accounts, and unauthorized transactions. The technology behind these tools executes real-time transaction monitoring and pattern analysis as well as suspicious behavior detection to stop damage before it happens.
Payment fraud through stolen credit cards and account takeovers through hacker access to customer accounts now represent major challenges. People are increasingly using return policy manipulation to commit refund fraud. Companies fight these challenges through fraud prevention tools that track transactions while examining user behavior and detecting suspicious activities during real-time monitoring.
U.S. Fraud Detection Software Market Segmentation Analysis
Component Insights
Software is the larger category, with a market share of 65% in 2024 because businesses are using ML, behavioral analytics, and real-time monitoring tools to fight fraud in the banking and retail sectors.
The services category has the higher CAGR because of the rising demand for consulting, implementation, and maintenance services. Businesses depend on expert assistance to combat complex fraud patterns because they need help optimizing their fraud detection systems.
The following components are studied in this report:
Software (Largest Category)
Services (Fastest-Growing Category)
Deployment Insights
The on-premises deployment is larger as the BFSI, healthcare, and defense sectors need comprehensive control and security for strict regulatory compliance.
Cloud-based deployment is the fastest-growing category with 17.9% CAGR due to the need for improved access, scalability, and reduced expenses. The ability to perform real-time data updates and access data remotely makes cloud-based systems popular, combined with increasing security.
Here are the categories of this segment:
On-Premises (Larger Category)
Cloud-based (Faster-Growing Category)
Organization Insights
Large enterprises lead the market with a share in 2024 because they can dedicate their resources to deploying sophisticated security systems. Their geographically dispersed operations, higher revenues, and tonnes of sensitive data make them attractive to cybercriminals.
Small and medium enterprises (SMEs) represent the fastest-growing category. They are adopting budget-friendly, scalable, cloud-based fraud detection software to protect themselves from the growing risks of fraud and stay competitive in today's market environment.
Here are the categories of this segment:
Large Enterprises (Larger Category)
Small and Medium-Sized Enterprises (Faster-Growing Category)
Application Insights
Payment fraud detection is the largest due to the necessity of protecting payment systems against unauthorized transactions, credit card fraud, and refund fraud.
The cybersecurity and data breach prevention category has the highest CAGR of 18.0%. Businesses are working speedily to protect sensitive information and stop data breaches because cyberattacks have grown in frequency of late. The vulnerability of critical data requires better security measures against modern cyber threats.
The following applications are analyzed in the report:
Payment Fraud Detection (Largest Category)
Identify Theft Prevention
Insurance Fraud Detection
Account Takeover Detection
Cybersecurity and Data Breaches Prevention (Fastest-Growing Category)
Industry Insights
BFSI is the largest category, with a share of 35% in 2024 due to the requirement for payment fraud, identity theft, and account takeover protection. The sector is one of the worst-hit by cyberattacks, because of the lucrative nature of this business and the data it holds.
Retail and e-commerce are the fastest-growing categories due to the increasing spending of such businesses on countering payment fraud, account takeovers, and refund fraud. The boom in online shopping due to the COVID-19 pandemic is a key factor driving this category.
Here are the industries studied in this report:
Banking, Financial Services, and Insurance (Largest Category)
Retail and E-commerce (Fastest-Growing Category)
Government and Public Sector
Healthcare
Telecommunication
IT and Telecommunications
Industrial and Manufacturing
Travel & Transportation
Real Estate
Others
Geographical_Outlook
The largest region is the Northeast, with a market share of around 45% in 2024. Since the region comprises large financial, IT, and government organizations, the need for sophisticated fraud detection tools to secure their information and transactions is surging here.
The South is the fastest-growing region due to its expanding economy. More companies across all sectors, including retail, healthcare, and telecommunications, are implementing fraud prevention solutions to meet growing risks and accommodate the rising volume of digital transactions.
Here are the categories of this segment:
Northeast (Largest Region)
Midwest
West
South (Fastest-Growing Region)
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U.S. Fraud Detection Software Regional Market Performance
The largest region is the Northeast, with a market share of around 45% in 2024. Since the region comprises large financial, IT, and government organizations, the need for sophisticated fraud detection tools to secure their information and transactions is surging here.
The South is the fastest-growing region due to its expanding economy. More companies across all sectors, including retail, healthcare, and telecommunications, are implementing fraud prevention solutions to meet growing risks and accommodate the rising volume of digital transactions.
Here are the categories of this segment:
Northeast (Largest Region)
Midwest
West
South (Fastest-Growing Region)
U.S. Fraud Detection Software Market Share Analysis
The market is fragmented because multiple companies offer diverse solutions to users. Specialized fraud detection tools are available with numerous small to mid-sized firms, which include ML-based tools, behavioral analytics solutions, and sector-specific fraud detection services for the banking, e-commerce, and healthcare sectors. The multiple provider options enable organizations to select fraud detection tools that match their specific requirements.
The market demonstrates fragmentation while specific providers maintain substantial market control. A few major companies have established reputations and advanced technological capabilities. These organizations establish industry benchmarks while luring major corporations with their complete, high-performance fraud detection tools.
U.S. Fraud Detection Software Companies:
IBM Corporation
FICO
SAS Institute Inc.
ACI Worldwide, Inc.
Experian plc
NICE Ltd.
LexisNexis Risk Solutions
BAE Systems plc
Oracle Corporation
SAP SE
Visa Inc.
Mastercard Inc.
U.S. Fraud Detection Software Market Developments
In January 2025, Overhaul launched the Overhaul FraudWatch for the shipping and logistics industry.
In December 2024, Featurespace won the U.S. patent for an advanced fraud detection system that uses AI to understand how real customers typically behave when making transactions. This system analyzes data from everyday purchases to create a behavioral profile for each customer. By learning these patterns, technology can spot any activity that does not match a customer’s usual behavior.
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