Loss due to online payment fraud According to a Juniper Research study, it is expected to exceed $ 206 billion over the next five years.
According to Juniper, the projected fraud figures between 2021 and 2025 are nearly ten times Amazon’s net revenue for fiscal year 2020.
The· Fighting 2021 Online Payment Scams The paper urges retailers and all merchants to investigate the use of machine learning-based fraud prevention platforms and make them an immediate priority.Juniper pays attention to the surge in synthetic fibers, and the problem is expanding in a pandemic ID and account hijacking scams, Along with relevant payment data, threatens the security of the entire account.
The purchase of physical goods in remote areas is considered the leading cause of online payment fraud, accounting for more than 47% of the 2021 fraud losses to date. Juniper urges payment fraud prevention suppliers to provide services based on digital identity verification to enhance security and combat the surge in account hijacking fraud.
Nick Maynard, co-author of the study, said: “Given the large number of online payment transactions around the world, it is imperative to leverage this transaction data to continuously detect fraudulent transactions.
“Payment providers who can use this data to identify the causes and tactics of new fraud will be the providers that have proven to be the most resilient to this significant market loss.”
Mark McMurtrie, an independent payment consultant, said: Retailers are now too late Especially now, torch papers have been ignited under online retail when adjusting their strategies. Since the outbreak of the pandemic E-commerce surged According to the National Bureau of Statistics, about one-fifth to nearly one-third of total retail sales.
“Retailers’ mindsets and systems need to be upgraded to reflect increased payments, the pace of money transfers, and the threat of new attacks they face,” says McMurtrie.
“Unlike retailers and banks, we find that criminals are quick to adopt new technologies because there are no business cases to submit.”
Consumer electronics retailer MaplinReborn under new ownership in 2019, it is one of the most vulnerable retailers to online fraud.
Millie Marshall, Managing Director of Maplin, describes the sector as “fraud-filled,” especially with a large number of resaleable high-value accessories. After reviving Maplin two years ago, he adds, the business was immediately exposed to criminal attacks.
“We were attacked by pretty sophisticated scammers from the beginning,” he said, with Apple products and electric scooters being one of the most targeted products and a frequent type of credit card fraud. It’s one of the scams. “There’s a great ecosystem of tools to manage it, but it’s a shame it exists.”
Currently acting as pure e-commerce play, Maplin outsources fraud monitoring and prevention to third parties. Use machine learning processes to leverage the expertise of Signifyd, one of the bands in the modern technology business that addresses the challenges associated with merchant fraud.
Marshall says the partnership is successful, but he admits that fraud is always occurring. If you’re collecting intelligence in addition to fraud, it’s manageable. “
New channels to encourage “friendly” scams
Another consumer electronics retailer headquarters worker said Computer Weekly In-store collections are one of the worst channels of fraud and show that criminals are taking advantage of new ways of doing things.
This is part of an evolving phenomenon known as “friendly” fraud, including falsely claiming that shoppers did not trade or receive deliveries.
“We’ve been abused a lot about returns,” Marshall said, explaining that, somewhat strangely, retailers have received multiple cans of baked beans instead of the expected returned PlayStation. To do. Obviously, consumers are taking advantage of the communication gap between payment providers and merchants to hold items that they say they have returned and at the same time keep refunds in their pockets.
“I received the device damaged or damaged, but it looks like new because it’s shrink-wrapped,” he adds.
“People buy something from a retailer, buy from us and return the broken one to us, so we are very enthusiastic about serial number tracking and the process, and so many You need to keep the evidence. That’s the key to fighting this activity. “
Ed Whitehead, Meaning
A consumer survey published by Signifyd in September 2020. Lego, Samsung and Wish.com have found that more than 36% of respondents mistakenly claimed that their credit account legitimate claims were fraudulent in order to receive a refund while retaining the product.
“During the pandemic, consumers were growing and behavioral changes weren’t always good,” said Ed Whitehead, Managing Director of Signified in Europe.
“The challenge for retailers is not to block legitimate customers. You need to make sure you’re not blocking the good as much as the bad. That’s the real skill. And that’s where machine learning-first solutions come in. “
So-called friendly fraud can also occur if someone accidentally or without permission executes an invoice without knowing it on a family credit card.These cases are mainly game Reported as fraudulent through in-app purchases.
“To tackle this requires sensitivity, as it may have been unintentional rather than a deliberate fraud attempt, so it could be resolved through dialogue and education,” says McMurtrie. ..
Alert in the face of an ongoing battle
Industry group UK Retail Consortium (BRC) published a retail crime investigation every June for the 12 months to March 30, 2020. The focus was on increasing violence and abuse of clerk, but mentioned the growing threat of cybercrime.
Attacks and breaches increased in 54% of the retailers surveyed, and 86% of respondents considered data theft a high or moderate threat. According to the BRC, phishing, whaling, credential cramming, and web app-based threats are just behind the scenes, with cybercrime increasing each year in retail stores that have been tracking since 2015.
Graham Wynn, Assistant Director of Consumer, Competition and Regulation at BRC, said: Moved to online commerce after the coronavirus pandemic began, And the whole process Supply chain From e-commerce, cloud systems, shift patterns to payroll and procurement, it’s rapidly being digitized and automated.
“As we become more dependent on these technologies, cyber risk increases and hacker tactics become more sophisticated. Retailers have been the best in the past year to protect their customers and prevent future breaches. We spent £ 160 million on deploying advanced systems, but more than ever, it’s more important for retailers to stay vigilant and adhere to the required security protocols to combat these new threats. is.”
Retailers and tech companies are working together to curtail efforts to address the challenges of online fraud and cybercrime.Introduction of Strong customer authentication regulations It is expected to help to some extent in the second half of 2021.
“People are always trying to break the system. Some aren’t even financially profitable, but that’s a skill and a right to brag,” says Whitehead. “We monitor the dark web and forums. In fact, we love to do it and show that it’s better than retailers or better than fraud prevention solutions.”
This is what retailers are facing and one of the reasons why the fight against online fraud continues to be a concern.
https://www.computerweekly.com/feature/New-thinking-and-systems-required-to-tackle-online-fraud-in-retail New ideas and systems needed to tackle online scams in the retail industry