Identity fraud accounts for a bigger share of fraud losses in the e-commerce and retail marketplaces in the United States and Canada than in prior years. Moreover, the increase is significant and fraud increased by 15%.
This upward trend is unsurprising. Since the pandemic, most shops and e-commerce companies can attest to the rise of digital-first transactions and payment methods. Customers have embraced contactless mobile and digital device technology such as mobile apps, payment readers, text to pay, bill-to-mobile, and mobile wallets in unprecedented numbers.
However, with increased consumer transaction and payment options comes an increase in a more complicated and sophisticated fraud. Bot accounts and synthetic identities, common in the financial industry, have spread to the e-commerce and retail sectors, unable to resist the allure of these contactless transactions. While the identifying elements may correspond to single fraud detection systems, these technologies are no match for today’s astute fraudsters.
Luckily, there is a ray of hope at the end of the tunnel
Merchants who invest in best practices by personalizing the customer experience across the various steps see a large drop in fraud while solidifying the client experience. In addition, organizations that commit to using more solutions and matching them to the proper transaction type are more likely to succeed. Finally, this technique is important at three contact points with customers: account creation, log-in, and transaction.
Account creation is a valuable opportunity that is frequently missed. This basic step of entering personal data contains vital information that shops and e-commerce companies can use to approve more clients. In addition, by introducing fraud detection tools earlier in the process—at account creation—any business is better positioned to collect intelligence that offers positive signals about whether the client is genuine or a phony identity.
When merchants use suitable passive fraud solutions, they get alerted to the possibility of fraud from the onset
The tools provide solutions to questions such as:
- Is the customer a real person or a machine?
- Do the identity elements match?
- Is the email from an unknown domain?
When clients check-in for the first time, they can be greeted as return customers by incorporating numerous signals and integrating cybersecurity at account creation. As a result, customers can expect to go through adding things to the cart, saving or inputting payment information, and checking out quickly and functionally. Again, the idea is for consumers to be able to buy products or services fast and easily.
Once the customer has completed the transaction, automated multi-layered fraud tools can determine whether or not to increase authentication. There is less need to increase friction at the transaction stage if the customer is transacting consistently with previous visits.
However, suppose the client orders a high-priced item that does not fit their typical purchase profile and subsequently wants to change the shipping address. In that case, introduce additional layers of verification to help prevent loss.
The possibilities of balancing risk vs. friction with robust multi-layered tools lead directly to greater profitability. Customer experience along the process also matters and will determine if they come back to your eCommerce store.
Author bio Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of best crypto exchange UK. He also writes non-fiction, ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice cream on his backyard porch, as should all right-thinking people.