Multifactor Authentication Helps QSRS Stop 99 Percent Of Mobile Order Ahead Fraud

Restaurants are still adapting to the digital-first paradigm brought on by the pandemic, with online orders from sit-down restaurants spiking by 134 percent since the pandemic began, and quick-service restaurant (QSR) chains experiencing digital growth of 225 percent. The behaviors that customers have picked up over the past year are here to stay, with a recent PYMNTS survey finding that 77 percent of individuals who used mobile ordering apps to pick up food will maintain all or some of the mobile ordering habit changes they made during the pandemic.

This increased mobile engagement is good news for digital-savvy restaurants and third-party app developers, but it is also ushering in a feeding frenzy for fraudsters. Security has become a top initiative for restaurants and developers, many of which are enabling multifactor authentication (MFA) protocols that have been proven to stop more than 99 percent of such attacks.

The May Mobile Order-Ahead Tracker® explores the latest digital ordering developments, including how fraud tactics have evolved in light of record-setting digital ordering numbers, how QSRs and app developers are leveraging MFA to fight back and how customers’ ordering habits have evolved over the past year.

Developments From Around The Mobile Order-Ahead World

Rewards points, personal data and cold hard cash are most fraudsters’ primary objectives, but some bad actors are leveraging less conventional schemes to dupe customers. Two Japanese restaurants in San Francisco recently began doing business on DoorDash and Grubhub by impersonating other restaurants that had either already closed or were operating elsewhere, leading diners to believe that the long-established restaurants were still in business. The imposter restaurants were quickly removed from the apps after diners noticed their decided lack of quality.

Digital sales are forming an ever-larger share of QSR chains’ gross revenue as mobile ordering grows more popular. Chipotle’s recent earnings report stated that its digital sales grew by 133.9 percent during Q1 2021, for example, resulting in digital channels accounting for 50 percent of its total sales volume for the first time. Digital sales accounted for only 26 percent of revenue during the same quarter last year. The report also stated that mobile order-ahead currently accounts for half of the company’s digital sales.

Customers have a plethora of mobile ordering apps to choose from, but trend toward the ones with the lowest fees and most generous promotions. A new survey found that 44 percent of customers were more likely to order from a restaurant that offered a promotion or discount, while 37 percent said they typically order via whichever channel has the lowest fee. This trend is likely to continue in a post-pandemic world, with four out of five consumers saying they will continue ordering deliveries even after pandemic-related restrictions are lifted.

For more on these and other mobile order-ahead news items, download this month’s Tracker.

The Coffee Bean & Tea Leaf On Reducing Digital Fraud At QSRs Through MFA

Multifactor authentication can stop more than 99 percent of attacks directed at mobile ordering systems, ranging from account takeovers to phishing, but it can also potentially result in customer friction. In this month’s Feature Story, PYMNTS talked to Michael Chachula, director of digital at The Coffee Bean & Tea Leaf, about how restaurants can address the competing objectives of fraud prevention and user experience.

Deep Dive: How MFA Can Help QSRs Fight Mobile Ordering Fraud

Fraud has become a growing concern among eateries of all types as mobile ordering grows more prevalent during the pandemic and fraudsters prey on new users. Bad actors are eagerly launching account takeovers and other forms of identity theft, but MFA can stop them cold. This month’s Deep Dive examines how bad actors are targeting QSRs with fraud attempts and why MFA measures can stop almost 100 percent of these attacks.

About The Tracker

The monthly Mobile Order-Ahead Tracker®, a Kount collaboration, offers coverage of the most recent news and trends and a provider directory highlighting key players across the mobile order-ahead ecosystem.