Figures from the annual BRC Retail Crime Survey report an exponential increase in e-commerce fraud, specifically fraudulent Card Not Present (CNP) refunds. As consumers shift away from spending on the high street and adopt a proclivity for online shopping, e-commerce fraud is growing at twice the rate of e-commerce sales. It’s expected that retailers will lose around $130bn in digital CNP fraud between now and 2023.
To combat this risk, online retailers have spent a staggering £8m, adopting a reactive measure rather than a proactive one. However, by investing in fraud detection and prevention solutions that verifies a user’s identity and cross-references it against fraud data before allowing transactions, merchants can curb significant losses from fraud
A data trail is at the heart of every transaction, even the fraudulent ones. If used effectively, data can expose malicious actors, especially when verifying identities at account creation. With the rise in e-commerce fraud, the use of specific data points can create barriers that prevent criminals from gaining access to e-commerce accounts, while simultaneously authorising legitimate customers to effortlessly access their accounts.
In mere seconds, smart data can be referenced, verified and used to prevent fraudulent transactions – saving online retailers time, money, and resources – while allowing legitimate customers to easily and efficiently complete a purchase.
Additionally, many online retailers are expanding into emerging markets around the world where mobile phones are proving an effective cost-efficient tool for identity verification.
As e-commerce continues to grow, so too does the risk and cost of fraud. Fraudsters will always go for the easiest, fastest and most lucrative payoffs and that means targeting retail sites that do not implement vigilant, vigorous practices for verifying customers and detecting fraud. In the burgeoning e-commerce landscape of today, an agile and data-centric approach to combat fraud is the need of the hour.
Zac Cohen is the general manager at global identity verification service Trulioo