Mobile Order-Ahead Takes On Account Takeovers

Can you put a price tag on a pandemic? There’s no shortage of figures (most of them bad) trying to tally up the damage. But if you want the inside story of how America is dealing with COVID-19, look to our most universal necessity – eating – for a fuller understanding.

In the April 2020 Mobile Order-Ahead Tracker®, a PYMNTS and Kount collaboration, bedlam has been confirmed in the food industry this spring, as beloved restaurants wink out of existence while others reinvent themselves in real time, all amid the human tragedy of layoffs and firings.

Against that backdrop, mobile order-ahead (MOA) eateries and delivery drivers have mobilized like a nutritional postal service, where “neither snow nor rain nor heat nor gloom of night” nor even a deadly pandemic is stopping today’s food couriers from swiftly delivering those tacos.

Though the restaurant industry shed over three million jobs and lost more than $25 billion in the first three weeks of March, according to the latest Mobile Order-Ahead Tracker, it’s expected that 50 million Americans will be dining at home in the glow of MOA apps by 2021.

That forecast may be an early glimmer of hope in an industry left reeling from historic events.

More Money, More Problems

Pitching in for the greater good, quick-service restaurants (QSRs) are foregoing delivery fees, while aggregators like DoorDash are temporarily waiving commissions. These are meaningful gestures for working restaurants, as well as for the millions of Americans who have been living on MOA for weeks. But along with the surge in MOA activity comes a corresponding rise in identity fraud.

Experiencing record order volumes and payments throughput can strain the basic payments and fraud-fighting software often used by smaller operations. Big or small, players in the food and food delivery spaces should expect exuberant new attack vectors to emerge quickly.

“Restaurants need to turn to real-time, AI-driven fraud prevention solutions to determine the appropriate level of identity trust behind transactions,” Brad Wiskirchen, CEO of Kount, told PYMNTS. “There is increasing potential for fraud to hit those companies that don’t already have robust fraud prevention systems in place. By establishing identity trust, QSRs can quickly approve high-trust, VIP, returning customers in a seamless manner while blocking low-trust transactions that are likely fraud.

“This AI approach means QSRs can eliminate time-consuming and labor-intensive manual reviews while also preventing chargebacks,” Wiskirchen said. That’s going to become more important as business goes from nonexistent to whatever comes next by late summer.

ATO Your Head Over Fraud

Of the many attack types that hackers prefer, one with a frustratingly high level of success is the account takeover (ATO). This form of hack haunts the MOA space, where personal identifiable information (PII) and card details are exchanged by phone and via online ordering platforms – all of which makes an irresistible feast for fraudsters.

Considering that the “…average ATO costs victimized customers an average of $290 and takes 15 hours to resolve…” as the report states, detecting and fending off ATO attacks is a matter of urgency for food operations already working on tightly squeezed profit margins. The choice of anti-fraud system then, needs artificial intelligence (AI) and machine learning (ML) inputs to scan transactions with scale and speed.

“Some prevention methods work behind the scenes, rather than blocking attempts at the point of entry,” according to the latest Mobile Order-Ahead Tracker. “AI and machine learning (ML) systems are some of the most effective methods, as they harness pattern recognition protocols to detect unusual activity. Kount’s new AI-powered ATO prevention system analyzes billions of different data points to detect and flag suspicious logins and transactions, for example, which are then blocked or sent to human analysts for further inspection.”