The impact of fraud on a business can be swift and severe.
Several payments companies have partnered with or acquired companies to help them deal with fraudsters.
While artificial intelligence shows promise as a fraud detector and defender, criminals are also using it to facilitate financial and identity theft.
Fraud in financial services carries implications beyond immediate financial losses, impacting brand safety, reputation and consumer confidence. Discover® Global Network acknowledged these risks as central to its strategy, particularly given the rising prevalence of digital transactions. Kate Weiler, director of transaction risk at Discover, said fraud prevention and reputation management are closely intertwined.
“A brand can be impacted at every interaction,” she told PYMNTS, adding that even a single fraudulent incident has the potential to erode consumer trust and damage the brand’s standing.
The complexities of modern payments amplify these challenges, Weiler said. With the surge in digital payment options, consumers expect seamless, reliable interactions with brands.
However, a brand’s reputation can suffer quickly if users perceive a lack of security or encounter friction in their transactions. To address this, Discover enforces fraud controls while aiming to minimize interruptions to the customer experience. This approach highlights the balance needed to protect the brand from fraud while maintaining an accessible and user-friendly interface, recognizing that excessive declines or hurdles could deter users and impact merchants.
Fraud prevention is not only a technical issue but also a reputational one, Weiler said. In highly competitive digital markets, the consumer experience must remain smooth to retain trust. Discover sees brand reputation and consumer confidence as key assets that require continuous protection, as they are often much harder to rebuild than they are to preserve. This risk management approach is crucial, considering the reputational cost fraud poses if not adequately addressed in an increasingly digitalized payment landscape.
Tokenization has emerged as a strategy in the fight against payment fraud, offering a secure, streamlined solution that minimizes risks for customers and businesses. In contrast to encryption, which scrambles sensitive data, tokenization replaces this data with unique tokens that are useless to anyone intercepting them. The technology provides an extra layer of defense without adding complexity to the customer experience.
“Tokenization allows us to secure the transaction while promoting a more seamless experience for the user,” Discover Global Network Vice President of Digital Products Valeri Vanourek said.
The adoption of tokenization technology aligns with the goals of Discover, maintaining high security standards and a frictionless user experience, she said. Tokenized data reduces the potential for fraud by rendering intercepted information unusable to fraudsters. As digital transactions grow in frequency, this process minimizes risk without compromising speed or reliability, an advantage over more traditional security methods.
Tokenization helps keep sensitive cardholder information secure without requiring added steps in the payment process, supporting Discover’s fraud mitigation efforts and its commitment to ease of use, she said.
In today’s financial services industry, where consumers demand security and convenience, tokenization represents a method to address both needs simultaneously, she said. For Discover, implementing tokenization is part of a larger strategy to support customer confidence and bolster transaction security across its network. The technology provides merchants and customers with a higher degree of protection against fraud while facilitating the kind of smooth, uninterrupted transaction experience that has become central to the modern digital economy.
As fraud tactics evolve rapidly, the strategy implemented by Discover includes layered security measures to detect, prevent and manage fraud. This approach combines data analytics and collaboration with acquiring banks and other stakeholders.
Discover Chief Information Security Officer Sunil Mallik said advanced analytics and machine learning are essential to detect and assess unusual patterns, helping the organization stay agile against emerging threats. Fraud prevention is not static but rather an adaptive strategy as attackers constantly seek new methods, including the use of AI.
“AI is in the hands of the bad guys just as much as it’s in ours,” Mallik said, highlighting the challenges of combating increasingly sophisticated threats.
The approach extends beyond detection to prevention, encompassing the entire payment journey. The Discover High Brand Risk Program, for example, integrates closely with acquiring partners to address high-risk transactions or merchants, focusing on categories vulnerable to fraud. Data insights from the program provide Discover with a clearer picture of merchant practices, helping the company identify potential risks and intervene when needed.
These data-driven strategies reflect a shift toward a proactive, intelligence-driven approach in the fight against fraud, in which Discover aims to identify vulnerabilities early and address them before they escalate.
Through these measures, Discover aims to promote transaction security and uphold compliance across its ecosystem, balancing operational security with customer and merchant expectations. This method serves to reinforce consumer trust, as Discover strives to build more secure, seamless payments across its extensive network.
Job cuts in government, technology and retail led the way as U.S. employers announced the largest number of cuts in one month since May 2020.
Among the 275,240 job cuts announced in March, 216,215 were in government, 15,055 were in technology and 11,709 were in retail, Challenger, Gray & Christmas said in a report released Thursday (April 3).
“Job cut announcements were dominated last month by Department of Government Efficiency (DOGE) plans to eliminate positions in the federal government,” Andrew Challenger, senior vice president and workplace expert for Challenger, Gray & Christmas, said in the report. “It would have otherwise been a fairly quiet month for layoffs.”
The total number of job cuts made in March was more than three times the 90,309 cuts announced in March 2024, according to the report.
By sector, compared to March 2024, government job cuts were almost six times higher, technology cuts were about 6% higher and retail cuts were nearly twice as high, per the report.
All the government job cuts made in March occurred in the federal government, the report said.
The top reason employers gave for cutting jobs in March was “DOGE impact,” which was cited for 216,670 of the month’s cuts, according to the report.
Other common reasons included store, unit or department closing, to which 17,666 job cuts were attributed, and market/economic conditions, which accounted for 11,594 cuts, per the report.
Challenger, Gray & Christmas also said in the report that employers are planning to hire fewer workers than they were a year ago. Companies’ hiring plans dropped by about 37%, from 21,102 in March 2024 to 13,198 in March 2025, according to the report.
The specter of uncertain job security may accelerate a spending pullback that is already in motion, PYMNTS reported Wednesday (April 2). Consumer confidence that was already shaken may have been further impacted by the Bureau of Labor Statistics’ latest snapshot of the labor market released Tuesday (April 1), which found that the labor market slowed in February, with a decline in job openings over the past year.
The Conference Board reported March 25 that consumer confidence slipped for the fourth straight month in March, due in part to a plunge in consumers’ short-term outlook for income, business and labor market conditions.
