People in general are more aware of — and concerned about — fraud as we pass through a second season of COVID, and eCommerce continues to rack up impressive stats, good and bad.
PYMNTS January 2021 Digital Fraud Tracker® done in collaboration with Simility, looks at the matter through the lens of technologies proving out at fraud intervention. First, on consumer sentiment, the Tracker says, “A recent study found that 60 percent of online customers expected fraud and scams to become more problematic during the holiday shopping season.”
Additionally, 79 percent of seniors and 70 percent of adults age 18 to 24 also said that they believed the pandemic was causing an uptick in fraud attacks and suspicious activity now.
Such numbers haunting consumer confidence just when business needs it most is not good, but fraud fighters are winning more battles in the cyber-wars using some very smart tools.
New Threats Evolving ‘All The Time’
As experts predicted holiday eCommerce to grow 35 percent from 2019 while brick-and mortar retail sales were seen falling by close to 5 percent, online fraud was suddenly everywhere.
“New threats are evolving all the time,” KP Brendel, director of marketplace operations at online thrift and consignment storefront Swap.com, told PYMNTS. “What we always look for is … trends and patterns. If something happened once, no one usually has that on their radar. But as soon as something becomes a pattern, you need to start looking into things.”
Cyberattacks often use brute force measures like botnets that target and overwhelm some digital defenses with thousands of fake charge and account opening attempts. Responding with machine learning solutions like adaptive decisioning is frustrating the fraudsters, happily.
Noting that Swap.com payments are processed by a third party for enhanced security, the Tracker adds, “Data is ultimately only as secure as customers want it to be, but many are already aware of the risks that poor password hygiene and other lax security practices pose. Fraudsters will always be on the lookout for potential targets, especially during the holidays and other periods of increased retail activity. A combination of third-party payment security, in-house transaction analysis and customer fraud awareness could therefore be key to keeping them from successfully launching attacks.”
Businesses Taking Action As Consumers Fret Over Fraud
From enterprises to small and medium-sized businesses (SMBs), companies are trying to frag fraud with platform tech that actively sweeps for the presence of bad actors and fake accounts.
“Businesses are also observing big changes in customers’ habits due to the pandemic and its associated fraud risks. A recent survey found that 60 percent of small to mid-sized businesses (SMBs) noticed that customers have been more worried about fraud during the pandemic and 40 percent said customers had shifted to using more secure payment methods as a result,” per the latest Digital Fraud Tracker®.
The new Tracker adds that “the pandemic was only exacerbating an existing issue, however. Security has been SMBs’ primary concern for the past three years — ranked as more important than reliability, cost and ease of integration when choosing payment providers.”
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