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Addressing Online and Mobile Commerce Fraud

By : Laurie Gentz

January 26, 2018 02:00 PM

 

With more and more consumers turning to digital and mobile channels to complete purchases, merchants and card-acquiring banks need to be more vigilant than ever when it comes to preventing e-commerce and m-commerce fraud.

 

As we move into 2018, criminals will be looking for any opportunities presented by the ongoing growth in activity in these channels, so it’s vital that fraud programs are ready to respond.

 

Eye-opening trends

 

By taking a look at some statistics on e-commerce and m-commerce, we can see just how important it is for merchants and financial institutions to be taking action to fight fraud in these channels.

 

A Business Insider Intelligence report cited by Retail Dive predicted that mobile commerce retail sales will account for more than a quarter (28 percent) of all e-commerce retail sales in 2018. That proportion could rise to 45 percent of all e-commerce sales by 2021.

 

In-store sales are rising too – increasing by around 3.8 percent in Q4 2017, according to the figures – but growth in total e-commerce purchases, including m-commerce, is thought to be up to four times quicker.

 

separate report produced by BigCommerce and payments firm Square showed that almost all Americans (96 percent) with internet access have made an online purchase in their life. Four out of five had done so in the month leading up to the survey.

 

The findings also showed that e-commerce in the US is growing at a rate of 23 per cent year-on-year.

 

These are exciting trends not only for the retail industry, but for financial services companies looking for new opportunities in the rapidly evolving payments space.

 

However, it’s crucial to remember that changes in how consumers and businesses complete transactions will also attract the attention of fraudsters. The onus is on card-acquiring banks, merchants and payment processors to take the necessary action to protect their customers and their business.

 

Up-to-date fraud prevention

 

Fraud detection and prevention systems should exist in a state of constant evolution, to ensure they are able to keep up with the changing tactics used by criminals.

 

As we move into a new year, here are some of the concepts that will prove particularly important in e-commerce and m-commerce fraud protection:

 

Real-time detection

 

With an increasing amount of consumer purchasing activity taking place online and in the mobile channel, it has never been more important for fraud detection programs to provide real-time transaction monitoring and ‘in-flight’ fraud prevention.

 

Analysis of chargebacks and blocked transactions

 

Analyzing data on chargebacks and blocked transactions can prove extremely useful when it comes to understanding the current fraud environment and minimizing the risk of legitimate purchases being falsely rejected.

 

Multifaceted protection

 

With so many potential attack vectors to contend with, it’s not sufficient to take a linear, single-minded approach to fraud prevention. The most effective fraud programs this year will have the capability to provide protection across various channels, collecting data from multiple sources, both internal and external.

 

Making the most of machine learning

 

The ongoing development of machine learning means it’s now possible for banks and merchants to deploy fraud detection solutions that adjust to the latest patterns and trends in the threat landscape. This sort of evolving protection could prove crucial for those businesses that want to stay one step ahead of the criminals in 2018.

Laurie Gentz

Marketing Manager, Fraud & Security Solutions

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Laurie is Financial Services Solution Marketing Manager at NCR. She is responsible for marketing NCR’s fraud solutions, with a specific focus on enterprise, cross-channel fraud.