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BizReport : Ecommerce archives : March 15, 2019

Reports: Look for fraud to increase

An update to online payment rules could increase the amounts and kinds of frauds online businesses deal with. Payment Services Directive (PSD2) is set up to better identify consumers, which should be a relief for both digital merchants and shoppers, but new data out from iovation indicates that the implementation of stricter controls in some regions will move fraudsters to regions that are not prepared for additional attacks.

by Kristina Knight

PSD2 uses multifactor authentication for all electronic payments an also implements third party access to payment accounts. Stronger authentication is a boon for merchants who are prepared to make customer authentication seamless for consumers, but many brands aren't ready for these changes. And, fraudsters moving in to regions where there are fewer consumer protections in place, because they can no longer steal from businesses or consumers with better protections, could leave these less-protected businesses with large targets.

"The merchants that succeed post PSD2 will be those that make consumer authentication as effortless as possible through methods like 'invisible' device-based authentication and biometrics. And with the likes of Facebook and Google becoming payment processors, merchants are going to have to compete with an ever widening marketplace," said Mark Weston, Compliance Manager, iovation.

More data from the iovation report can be accessed here.

Meanwhile, Forter has release their latest Fraud Attack Index, and among the more interesting findings is this: fraud rings have increased by about 26% YoY. Fraud rings are groups of fraudsters that band together to hack businesses or steal consumer and business data. Forter's report also found that because more fraudsters are using bots for mass logins, they can attempt nearly 100 attacks per second.

The report further found:

▪ Both Food/Beverage and Electronics industries have seen fraud increases of more than 70% YoY
▪ Policy Abuse has increase 170% since 2017 Q4 - policy abuse includes consumers cheating merchants by using coupons and discount codes
▪ Account takeovers have increased 45% YoY
▪ Returns abuse has decreased 90% YoY

"The shift in fraud attack methods shows that the online criminal community is continuing to increase in sophistication. Where once the point of transaction was the only point on the website a merchant had to worry about, now fraudsters strike at accounts which they can exploit in numerous ways including stealing gift card or coupon credit, stealing loyalty points and stealing personal information such as physical address or phone number," write the report authors.

Forter's Fraud Attack Index report can be accessed here.

Tags: ad fraud, advertising, ecommerce, ecommerce fraud, Forter, iovation, online payment trends

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