The big Fake-up call
The speed at which fraudulent transactions mutate across the ecommerce world is frightening. Merchants in Europe, particularly Germany, France and the UK, are at tremendous risk of breaches because online shopping is so prevalent in these markets. According to an article in Ekata by Mastercard, “Two out of three online shopping ecommerce websites identified a noticeable rise in fraudulent activities while over 85% of online retailers in Switzerland reported being victims of fraud in 2022.”
The rise in AI and machine learning also threaten online payment security and data. It can access private data in various innovative ways. It’s a wake-up call for ecommerce merchants that should not be ignored. That’s why fraud prevention in online payments has become increasingly important over the past decade.
Types of online payment fraud
There are multiple methods of online fraud. As mentioned above, new technologies invite new ways to commit fraud because it’s a goalpost that keeps moving.
Here are some of the most common forms of online payment fraud:
Phishing
Any emails and websites that require personal details like card or bank account details and login credentials are subject to phishing.
Identity theft
Identity theft happens when one person uses someone else’s personal information to open bank accounts, clean out credit cards, make unauthorised purchases, or commit other kinds of fraud.
Chargeback fraud
It’s also known as first-party fraud and happens when customers claim chargebacks from their banks for products delivered in-tact by the merchant.
Account takeover (ATO)
These takeovers happen when a fraudster illegally gains access to a site using stolen credentials. According to The Paypers, ATO fraud increased by over 131% in the second half of 2022. Merchants should spruce up their fraud prevention measures to guard against ATO ahead of Black Friday and Xmas shopping peaks this year.
Card-not-present fraud (CNP)
All online card payment fraud belongs to this category. Fraud of this type occurs when both the card is not present and payment is processed. Fraudsters use stolen credit cards or private data to complete unauthorised purchases. It’s difficult to combat because the person is not physically present to verify their identity. That’s why Strong Customer Authentication (SCA) has become a requirement throughout Europe. The most widely adopted method to meet SCA requirements is 3D Secure v2, which helps prevent card-not-present fraud by verifying that the payment is coming from the real cardholder.
The fraud prevention balancing act
If you’ve balanced fraud prevention and security with site usability, you have a winning solution. At the end of the day, businesses should build ecommerce sites ready to sell. And if potential customers can’t navigate, browse and pay – you don’t have a business.
Most ecommerce businesses use an array of tools to prevent fraud. Choose best-in-class tools and features, including machine learning, AI, risk-scoring, behavioural element analyses and rich data. State-of-the-art identity verification features will keep customers’ experience front of mind to ensure they feel safe.
One critical decision has a profound impact on how you conduct business online. When you choose a payment provider that takes fraud and security seriously, you place a guard at your front and back doors.
Why don’t you speak to Truevo? Truevo complies with PCI DSS standards and enforces SCA (Strong Customer Authentication) compliant solutions via 3D Secure v2 protocols in all our products, meaning your ecommerce transactions are protected with the latest online authentication. If you aren’t a Truevo merchant already, speak to us. We can’t wait to transact securely with you.
