Internet Retailing has reported that an astonishing 50% of online retailers find it difficult to keep up with fraud trends. The new study, carried out by Worldpay, also revealed that 80% of online merchants do not feel confident in their ability to manage and prevent fraudulent threats. The growth in multichannel shopping has fuelled an increase in criminal activity online, with more markets, sales channels and payment methods available than ever before. Good news for customers, but bad news for businesses trying to stop fraudsters taking advantage of it.
The study also found credit card fraud was one of the biggest concerns for online merchants (82%), ahead of e-wallets (78%) and mobile payments (75%). With the ecommerce boom showing no sign of slowing down, merchants need to be prepared to manage the growing risks that come with expanding cross-border operations and constantly evolving payment method platforms.
Preparing for the rest of the festive shopping period and staying ahead of fraud trends is crucial for retailers, especially with fresh reports that friendly fraud chargebacks were one of the top four types of online fraud detected over this year’s 4-day extravaganza.
‘Friendly fraud’ hits merchants when a customer uses a card to make a transaction online but then wishes to reverse the purchase and contacts their bank to recoup the funds, despite the fact they have actually received the product. This places the onus on merchants to cover the chargeback fees required from banks, leading to a potentially devastating loss of revenue for businesses.
Merchants can arm themselves to combat the risk of ‘friendly fraud’ by implementing the correct tools such as Chargeback Alerts, which enables merchants to avoid lengthy transaction disputes and the negative ramifications that go hand-in-hand with each unauthorised transaction. By alerting the merchant to suspicious activity, ultimately the merchants bottom-line is improved, and the business continued success remains intact.
