Bolt ID: A Networked Shield Against E-Commerce’s $35B Fraud Crisis

SAN FRANCISCO, CA – December 01, 2025 – As retailers brace for the annual torrent of holiday shopping traffic, a less visible but far more insidious threat is reaching a crisis point: synthetic identity fraud. Checkout technology leader Bolt today announced a new weapon in this fight with the launch of Bolt ID, a network-based identity system designed to protect merchants and consumers from this burgeoning form of digital crime.

The system aims to tackle a problem of staggering scale. Synthetic identities—fraudulent personas crafted from a mix of real and fabricated personal information—are notoriously difficult for traditional security systems to detect. This challenge is contributing to projected global e-commerce fraud costs expected to surpass $138 billion in 2025, with synthetic fraud alone accounting for an estimated $35 billion of those losses.

The Anatomy of an Invisible Threat

Unlike traditional identity theft where a fraudster impersonates a single real person, synthetic identity fraud is more complex. Criminals combine stolen data, such as a valid Social Security number, with fictitious names, addresses, and contact information. Over time, they use these manufactured identities to build seemingly legitimate credit histories, open accounts, and make purchases, often across multiple retailers, before "busting out" and disappearing with goods and credit lines, leaving businesses with massive write-offs.

The losses are accelerating. Independent analysis confirms the grim outlook, with card-not-present (CNP) fraud—the category that covers most e-commerce transactions—projected to cause $28.1 billion in losses by 2026, a nearly 40 percent jump from 2023. This surge is fueled by the increasing sophistication of fraudsters who leverage AI to generate synthetic profiles at scale, overwhelming siloed defense mechanisms. Experts note that these profiles often evade detection because they don't trigger alerts associated with a single known victim.

"The future of e-commerce depends on environments that people can trust, yet the foundations behind that experience have not kept pace with the way shoppers live and buy," said Ryan Breslow, Founder and CEO of Bolt, in the announcement. "Many systems still assume that identity is fixed, when in reality it shifts across devices, retailers, and moments of intent."

A Networked Defense Against Fragmented Attacks

Bolt ID’s strategy hinges on a powerful concept: the network effect. Rather than analyzing transactions in isolation at a single merchant, the system connects and analyzes identity signals across Bolt's entire checkout network. This broader perspective allows it to spot patterns that are invisible to individual retailers. For example, a new email address paired with a shipping address previously used with a different name and payment method on another site in the network could raise a red flag indicative of a developing synthetic profile.

A core feature of this new defense is device possession verification. The system uses one-time passwords (OTPs) sent to a user's phone or email, or platform-native passkeys, to confirm that the person making the purchase is in control of the device associated with the identity. While fraudsters can easily acquire stolen personal data on the dark web, gaining control of a victim's physical device is significantly more difficult. This aligns with industry trends showing a dramatic rise in mobile-based fraud, making device-centric security more critical than ever.

This approach reflects a broader industry shift towards what analysts call "Cyber-Fraud Fusion"—an integrated strategy that combines data from cybersecurity, fraud prevention, and identity verification to create a more holistic and adaptive defense. By confirming a real person is behind a purchase, Bolt ID aims to erect a significant barrier against the most common synthetic fraud tactics.

Redefining Risk for Retailers and Shoppers

For merchants, the potential impact extends beyond just preventing individual fraudulent transactions. The high volume of synthetic fraud contributes to higher operational costs for manual reviews, increased chargeback rates, and the risk of turning away legitimate customers due to overly aggressive fraud filters—a costly problem known as false positives.

"Shoppers expect the information they share to support a safe transaction, and meeting that expectation now requires a broader view than any single merchant can maintain," noted Justin Grooms, President of Bolt. "Bolt ID helps connect signals that would otherwise remain fragmented."

This network-level intelligence promises a more nuanced risk assessment. A transaction can still proceed if a shopper chooses not to verify their device, but it will be flagged as higher risk. This flexibility helps balance security with a frictionless customer experience. Furthermore, the system allows shoppers to reuse verified delivery and contact information from previous successful transactions, which strengthens data integrity and reduces the risk of fraudulent address manipulation.

Crucially, Bolt has positioned Bolt ID as a pure security and identity verification tool, distinct from its optional Bolt Account feature used for saving checkout information. The company states the data is used exclusively for fraud prevention and is not leveraged for marketing or personalization, a critical distinction for privacy-conscious consumers. This "quiet, always-on layer of protection" is designed to give shoppers a stronger sense of safety and more agency over their digital identity without adding cumbersome steps to the checkout process. As the digital and physical worlds become ever more intertwined, establishing this baseline of trust is no longer just a feature, but a fundamental requirement for the future of commerce.