Digital acceleration is changing the way financial services providers interact with their customers. The rise of e-commerce, fintechs, cryptocurrency and embedded finance options from alternative lenders has transformed the financial services industry, and businesses must now provide a secure but seamless customer experience.
Consumers are driving this demand, fueled by two factors: a natural shift toward digital, aided by disrupter technology providers and their user-friendly products, and a pandemic-induced online boom. However, with these changes come new possibilities. And not always in a good way.
Digital Fraud Landscape Of 2022
Financial services, in particular, have shifted to a primarily online format as the use of digital technologies for online shopping expands. Using online financial services enables consumers to make quick, seamless payments and transactions, bringing a new level of convenience to their lives.
However, the shift to virtual financing introduces new fraud risks. Technology fraud poses a threat to our financial and business well-being, whether it’s stolen credit card information or hacked payment app accounts. Knowing these potential dangers can help your business be aware of various e-commerce fraud detection while keeping you and your customers safe.
Businesses are dealing with an evolving fraud landscape as they keep up with consumer demand for digital services. Online payment fraud losses alone are expected to exceed $206 billion by 2025. Fortunately, advances in fraud detection and prevention methods have accelerated, with machine learning and AI allowing businesses to keep up with fraudsters’ rapid evolution.
Best E-commerce Fraud Prevention Trends For 2022 & Beyond
Managing fraud risk requires relentless effort, from rising numbers of data breaches to increasingly sophisticated and organized threats. In the ever-evolving digital age, fraud risk and control take a very different turn than in years past.
The following are a few major digital e-commerce fraud prevention trends for 2022 and beyond:
- Design Personalized Services
Don’t just copy/paste the legal policies of random e-commerce web stores onto your own. Take your time and consider how you might want to defraud your online e-commerce store. If you sell on Facebook Marketplace, make sure your policy covers that as well.
Depending on the product niche and location, fraudsters often employ ingenious methods. Create policies and implement the necessary credit card fraud prevention measures to reduce your risk.
Stick to your policies once you’ve made your decision. Don’t give in if a customer tries to get you to break your own rules! Even if the lead appears genuine and is likely to result in a successful payment, breaking your store’s policy must be prohibited.
- Make Use Of Verification Software
To combat e-commerce fraud, experts recommend using an address verification system (AVS). This helps ensure that the transaction is valid by verifying the address of the person who claims to own the credit card.
CVV (Card Verification Value) technology is also recommended. This anti-fraud security feature adds another layer of protection, ensuring that the card is in the hands of the cardholder.
- Leverage Email Authentication
Email fraud is one of the common types of fraud. This could be an email from a customer or a bogus email purporting to be from a supplier or bank.
A message sent from a fake email address is the most damaging and difficult to detect. However, the only way to avoid this is to use DMARC—Domain-based Message Authentication, Reporting, and Conformance—for email authentication.
Email authentication can help protect your domain from being misrepresented and protect you or an employee from clicking on a potentially harmful fake link.
- Determine The Source Of Transactions
Understanding what device order is placed on can help you screen for e-commerce fraud more effectively and appropriately. Fraud profiles differ between iPhones, iPads, Android devices, etc.” “He clarifies.
Device assessment is critical to fraud prevention. It aids merchants in detecting human versus bot interactions, identifying malicious intent, and highlighting account takeover anomalies. Even if the identity and payment data are correct, the identified device risks may increase the overall transaction risk.
- Look For Anti-Fraud Software That Incorporates Both Artificial And Human Intelligence
Using a fraud protection system that combines machine learning and human experts to prevent fraud is a good idea. Any additional information that merchants can obtain to assist them in deciding whether to approve or reject an order is always beneficial.
These systems aid in the reduction of e-commerce fraud in the following ways:
- Fraud prevention firms analyze millions of transactions using advanced machine learning techniques combined with human intelligence to spot fraudulent patterns.
- The human element must be included in order to calculate specific tolerance and risk levels. Retailers benefit from this type of data because it provides them with real intelligence.
- Ensure That Your Software Is Up-To-Date
Shaw recommends that you make sure you’re running the most recent version of your operating system. To prevent fraud, updates with security patches are released on a regular basis. Every day, new vulnerabilities, viruses, and malware are discovered.
The methods used by fraudsters to attack online merchants are becoming more sophisticated. As e-commerce becomes more popular, the number of attacks on web stores is increasing.
However, e-commerce merchants are becoming more sophisticated in detecting and deterring online criminals. The e-commerce fraud prevention solutions and techniques mentioned above can assist you in securing your business with minimal effort.