As fraudsters grow more sophisticated, so too must the fraud defenses of eCommerce sites and other operators who sail the shark-infested waters of digital commerce.
We explore aspects of the fraud fight in “Combating Online Fraud With Digital Identification,” a PYMNTS and Prove collaboration, and part of the Digital Identity Tracker® Series.
The Tracker notes that chargeback fraud is projected to cost merchants and banks more than $100 billion in 2023, with merchants paying the bulk of it at $79 billion. Other forms of fraud like account takeover (ATO) that use automation maliciously are also popping up in the endless game of whack-a-mole between fraudsters and their targets.
The relentless intensity of fraud is driving companies to harden their defenses, in no small part due to consumer pressure for more security in transacting.
Per the Tracker, “PYMNTS research found that security is highly important for 83% of consumers, while 53% say consistent experiences across different platforms have a very or extremely big impact on their trust in financial institutions. These sentiments are shared by regulators, who are increasingly issuing guidelines for uses of authentication technology. Some industry representatives worry, however, that government regulations that focus too heavily on security could handcuff their ability to deliver convenience.”
As we found — and as the Tracker also states — “The top three motivators for consumers to adopt advanced identification technologies all focus on convenience, according to PYMNTS research. Whether a technology was more convenient or faster to access topped the list, serving as an important driver of interest for 40% and 39% of consumers, respectively. Whether a technology was easier to use came in third, at 36%. Another 35% of consumers were driven by more secure data, followed by 28% driven by better trust in service providers.”
Ease of use and convenience stand out as clear differentiators for fraud solutions — a fact that merchants and security providers must consider with their anti-fraud offerings and choices.
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