The firm said that there have been shifts in consumer preferences in payments, while, at the same time, there are new threats that come with new purchase channels.
Among the five challenges, according to the whitepaper, that should take priority over others: Merchants must recognize the need to accept payments that they deem high risk, and they must see that fraud attempts are gaining speed. There are also the burdens that are caused by manual reviews and the continuous need to make data actionable and to create KPIs that are actionable as well.
Against the backdrop of card-not-present transactions, the industry expects CNP fraud to grow alongside the growth of eCommerce transactions. The eCommerce arena itself is slated to grow to as much as $480 billion by 2019. The losses of CNP fraud are projected to be as high as $6 billion by 2018. Among the key drivers of such fraud will be, and has been, the transition in the U.S. to EMV. Would-be criminals have been transitioning their efforts online and away from physical stores.
Broadening channel choices also means that merchants are more susceptible to fraud, according to Vesta. The fraud losses tied to mobile payments come in at $3.34 per dollar of fraud loss versus $3.29 for other channels, said Vesta, citing LexisNexis.
In a statement, Chris Uriarte, chief strategy and payments officer at the firm, said: “Merchants are facing a fork in the road where they are going to have to decide if they want to be in the business of fighting fraud or of selling their goods and services. They can devote their operational resources to building in-house solutions that are difficult to scale, or they can look to a more experienced third-party vendor who will allow them to refocus on activities that will grow the business.”