The real cost of fraud
Australia’s payments landscape is changing dramatically, as more businesses and consumers adopt online methods of buying and selling. Omnichannel sales opportunities are highly beneficial to businesses – enabling them to sell to anyone, anywhere, and in nearly any way they want, be it via mobile, online, or in a traditional bricks and mortar environment. However, the changing nature of commerce and the payment landscape brings increased risk to businesses and their customers.
Criminals are always looking for new ways to cheat the system for financial gain. With more people embracing online and mobile shopping methods, we’ve seen a sharp spike in the incidence of online fraud. Online credit card fraud has soared, costing Australian cardholders $417.6 million in 2016.
While businesses work hard to keep ahead of the fraudsters, they’re often at the losing end. In fact, they seem to be outnumbered, as new tactics are developed to exploit weaknesses in existing systems, including the security mechanisms aimed at preventing such activity.
The increased risks of omnichannel commerce require attention from card issuers and businesses alike. Finding the right combination of fraud prevention and protection without negatively impacting customers or turning away sales is a balancing act that takes time and fine-tuning.
Often there are indicators that can help identify when fraud is happening or about to happen. However, as more payment methods are released to facilitate faster online transactions, security protocols and capture technologies can be readily overlooked.
To this end, ecommerce fraud has grown dramatically in areas like new online payment methods, account takeover and payment fraud. Ecommerce businesses and banks are quickly realising the lack of security measures in place can be detrimental, to both the customer’s experience and the business’s bottom line – and they are searching for solutions.
Safeguarding your business from financial vulnerabilities
With ecommerce merchants, issuers and customers all becoming increasingly aware of the potential for attack, the uptake in prevention technologies and secure transaction portals is increasing. Rather than relying on in-house fraud detection and prevention solutions, more companies are outsourcing to providers that can manage the entire transaction life-cycle.
With this in mind, online and omnichannel businesses should assess their current solution and evaluate if it is providing them with adequate protection.
Businesses must look for end-to-end payment protection and management solutions that tackle ecommerce fraud head-on. The best solutions deliver intelligent analysis of the data collected throughout the transaction life-cycle, and/or during a chargeback claim to protect businesses from fraudulent actors.
Three steps businesses can take to protect themselves against payment fraud:
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Find a prevention method that doesn’t compromise customer experience and sales.
Ensure that the solution has a proven screening method that allows you to identify potential risks as early as possible.
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Remember that automation is key in minimising the risk and errors
That can come with fraud prevention, and ensure you keep abreast of new technology and evolution of security systems to deliver the best experience to customers in the omnichannel sales environment, while protecting payments and the bottom line.
Omnichannel is about delivering a seamless customer experience, and your fraud prevention and chargeback process should aid in this mission.