Connect with us

Business

IDENTIFYING FRAUD IN A WORLD OF COVID-19 COPYCATS

Published

on

By Ian Newns, Fraud Specialist at RSA Security

 

The pandemic has changed much about the way we live and work today. Unfortunately, as is often the case, those with malicious intent have been the quickest to react. They saw the huge surge in online consumer spending at the start of the year and immediately set about ways to capitalise, by hiding themselves among the increase in legitimate transactions. Banks continue to bear the brunt of these increasingly skilled campaigns: last year, over £1.2 billion was lost to fraud in the UK.

Payment card scams accounted for the largest proportion (48 per cent) of these losses. If financial institutions want to get better at detecting and repelling these attempts, the answer lies in taking a data-driven and context-aware approach, so your analysts can identify new patterns as they emerge.

 

From holidays to the yoga craze

Customer data is the key to unlocking value for the typical fraudster, and they have plenty of ways to get hold of it. According to latest RSA Quarterly Fraud Report, phishing remained the most prolific type of fraud threat in the second quarter of this year, followed by brand abuse attacks, where fraudsters imitate a legitimate brand in online content such as social media, with the aim of misleading users. Despite being one of the most prolific and well-recognised online fraud tactics of the past decade, phishing emails are getting better at mimicking legitimate links, messages, accounts, individuals and websites, and successfully tricking users into giving up account logins, financial, or personal data.

Ian Newns

The result is that there’s now a glut of financial and identity data at the disposal of fraud groups today. And they’re using it in increasingly sophisticated ways to commit payment fraud.

For example, when COVID-19 hit, the payments landscape changed almost overnight. Down went bookings with travel companies, cinemas and theatres, and up went spending with supermarkets, sports shops, and home furnishing and DIY stores; in fact, one of our home furnishing merchants recorded a 133 per cent increase in spending via online channels from Q1 to Q2 2020. While the panic buying of March thankfully seems to have abated, consumers’ changing preferences and appetite for products such as yoga mats, bread flour and house plants is likely to continue, especially as regional lockdowns take place across the UK.

Well, fraudsters noticed these patterns too, and adapted their behaviour to mimic that of legitimate cardholders. While Q2 saw a 67 per cent quarter-on-quarter drop in mentions of hotels and airlines within the social media fraud groups that our fraud analysts track, scammers instead migrated to popular high-value purchases such as treadmills and exercise bikes.

 

Blending into the background

Other tricks designed to outwit traditional fraud prevention measures include the deployment of tools to alter browser session characteristics. An emulator could make a Windows machine appear to be an iOS session, for example. Or manipulations could be made to subvert timestamping, which would otherwise reveal that a transaction is being made from a different time zone, and therefore potentially a fraudster.

Other techniques we’ve spotted in recent months include routing traffic through countries where customers of particular brands are more likely to live, and the monitoring of users via remote hacking tools to learn patterns of behaviour that can be repeated later. The emergence of the latter tactic is an interesting one, as it moves fraud away from its historic use of automation, which helps fraudsters run mass credential stuffing and other mechanised campaigns. If a scammer believes a specific high-value individual is worth the extra investment of their time, they’re now prepared to spend more time and effort mimicking their online behaviour with the hope of a big pay-off.

Many of these techniques are shared on underground cybercrime forums, and even surface websites and social media groups. A recent surge in first-party fraud, where scammers make a genuine purchase but then fraudulently claim a refund, could also be helped by this kind of information circulating online. Forums discuss the different processes that individual merchants follow and some even explain to fraudsters how they can claim a refund without needing to make a purchase. Unfortunately, if the loss is relatively small, card issuers would often rather write-off the transaction than challenge the customer requesting a refund.

 

Focus on the data

Fortunately, there are things that banking fraud teams can do to reduce losses without deterring legitimate customers. Context is key: any fraud-prevention strategy you put in place must look closely at changing consumer behaviour and spending patterns to spot the fakes more easily. It should also look at individual spending: a consumer may make a one-off, high value purchase for a new PC, for example, but they’re not likely to do so more than once in a short space of time.

This approach should be employed across all purchasing channels: mobile app, website, call centres etc. Calculate transaction volumes for each and check to see where fraud is highest. For example, as mobile purchases surged this year, so did fraud volumes—rising 26 per cent year-on-year in Q2. An omnichannel approach will give you a clearer, contextual view of fraud that will hopefully improve your detection rates.

Finally, continue to enhance supervised machine learning tools with new data as it comes in. As long as it’s accurate and timely, it really is a case of “the more, the better” in this situation. Data-driven approaches like this enable fraud teams to adjust policies, create new ones and make better-informed decisions to enhance detection, even as fraud patterns evolve.

The bottom line is that fraud, like cybercrime, is an arms race. The scammers are constantly innovating with new tools and techniques, shared with each other across dark web forums—so we must respond in kind. That means taking an adaptable, data-driven and context-aware approach that remains effective even as fraud changes.

With Open Banking rules offering consumers more choice than ever in whom they bank with, friction-free security and high rates of fraud detection will increasingly become a market differentiator.

 

Business

THE ACCELERATION TOWARDS A MOBILE FIRST ECONOMY

Published

on

By

By Brad Hyett, CEO at phos

 

Over the last year, we have seen a big shift towards contactless payments. Fuelling this has of course been the coronavirus pandemic, which has made the public hesitant to handle cash due to the health concerns.

As multiple national lockdowns forced physical stores to close, and customers demanded easy, cash-free payment options, merchants had to quickly adapt. The result? An increased provision of pay and collect services.

In the UK alone, 83% of people use contactless payments according to data from the Office of National Statistics.

So it’s vital that merchants are equipped with the most efficient payment solutions, as the UK heads towards a mobile-first economy.

 

Proliferation of contactless payments

In 2020, 90% of UK card payments were contactless. This equates to an increase of 12% on the year prior, despite the total number of payments made falling by 11% from 2019 to 2020. Moreover, the affordability of smartphones has increased significantly over the last decade. And it’s estimated that 84% of UK adults now own one.

We’re Seeing merchants embrace more efficient and cost effective payment methods in response. While physical payment terminals are often too expensive for many small businesses, software point of sale, or SoftPoS, enables merchants to turn hardware that they already own – i.e. their mobile device – into a point of sale terminal.

With merchants increasingly adopting these innovative technologies, contactless payments will continue to gain popularity among the general public. In 2020, 13.7 million people in the UK either didn’t use cash at all or only used it to make a single purchase. That’s double the same figure from the previous year.

 

Changing consumer demand

Now more than ever, consumers are aware of how innovative payment solutions can add efficiency to their daily lives. As such, consumers now demand better payment services, including reduced queuing times, checkoutless stores, and bespoke loyalty schemes.

Businesses such as Mercedes offer an end-to-end digital car purchasing service, so customers can go through the whole car purchasing journey from the comfort of their own home. This includes car deliveries, financing, insurance and more.

Meanwhile, eCommerce giant Amazon has started trialling checkoutless ‘Go’ stores, speeding up the shopping experience by eliminating the queuing process altogether. The days of waiting for a table at a restaurant are also over, as more people have grown used to booking in advance.

Hence, it’s important that we empower small businesses to remain competitive and provide them with the payment solutions to meet customer demand.

 

Global transformations

The digital payments revolution isn’t slowing down anytime soon. By 2026, only 21 percent of transactions will be made using cash.

The US might have been slow out of the gate, but it’s starting to see increased adoption of mobile payments. In-store mobile payments grew by 29% in the States last year alone.

This growth was primarily fuelled by Gen Z-ers and millennials. Latest projections show that there will be 6 million new mobile wallet users by 2025, with millennials accounting for 4 million of this figure. These two generations, the former in particular, have grown up with mobile banking.

For most Gen Z-ers, their first foray into financial services was with a challenger bank like Starling or Monzo. These banks are able to offer online features such as ‘split the bill’, fee-free withdrawals abroad and much more to cater to the modern financial needs of the younger generation.

The Middle East experienced similarly sharp increases in contactless payments. From 2019 to 2020, there was a 200% growth in contactless transactions. This shift towards a mobile-first economy in the region was inevitable; the pandemic merely accelerated this shift. A recent study showed that 80% of people living in the Middle East planned to continue using contactless payments post-pandemic, with speed and security being the main draw.

 

The future is mobile

As parts of the world now start to come out of lockdown, there’s an openness to new solutions and a widespread acceptance of new technologies.

It is now a case of when, rather than if, we’ll see a permanent shift to cashless in the future. For businesses, embracing digital innovation will be key to remaining competitive and keeping pace with consumer demand in this fast-changing payments landscape.

 

Continue Reading

Business

HOW MERCHANTS CAN IMPROVE THE ONLINE PAYMENTS EXPERIENCE

Published

on

By

By Alan Irwin, Senior Director of Product at Global Payments UK

 

The dramatic increase in online shopping over the past 18 months has encouraged many businesses to invest in developing their omnichannel shopping experiences. The reasons vary – some are keen to capitalise on the trend of older shoppers migrating towards ecommerce and some are trying to make up for loss of sales in brick-and-mortar stores during the pandemic. It is also true that many businesses are shifting their models to sell direct to consumers to avoid high marketplace fees and are therefore building their ecommerce channels for the first time.

The checkout experience is arguably the most important and delicate part of the ecommerce transaction, as it can make the difference between a happy customer likely to return, and a shopping cart abandoned out of frustration and confusion. A survey from March 2020 suggested that 88% of online shopping orders were abandoned, i.e. not converted into a purchase. A seamless, customer-centric online payment experience is therefore critically important in ensuring completed transactions. But with so many payment providers available, what should businesses be looking for when trying to keep friction to a minimum?

 

Keep clicks to a minimum

Less touchscreen interaction equals less abandonment. Adapting the payment page to fit any device and supporting popular mobile digital wallets like Google Pay ensures a seamless, stress- and hassle-free checkout experience for the customer and keeps clicks to a minimum. Friction can present itself in the most minor features – for example, when the customer is navigating the payment form, the appropriate keypad should be shown to the customer when required. It’s much easier to enter a card number using the dial pad instead of switching between QWERTY keypad layouts.

Simplifying online forms with autofill and tokenisation also significantly reduces friction at checkout and shortens necessary time taken. Ensuring checkout forms are tagged correctly for “autofill” is a great way to offer customers a single-click to input the payment, shipping, and billing data that they have stored in their browser profile. Similarly offering a guest checkout option will help convert customers who are in a hurry or looking for a one-off purchase. This can also be achieved by offering to store the payment details (called ‘tokenisation’) for express repeat and one-click purchases.

 

Make it easy to understand

A tailored payments approach can increase both domestic and international global sales. By offering a checkout experience in the customer’s language, the option to pay in their currency of choice, and use their preferred method of payment (whether it’s PayPal, Alipay or card), businesses can build loyalty quickly and put customers at ease. It is equally important for merchants to ensure they always display simple direction and information about next steps to instil confidence and prevent customer drop-off. The customer should be informed of what is happening at every stage in the process, for example, whether they will proceed to SCA (Secure Customer Authentication) next or go straight through to completion.

In addition, validating forms in real-time means merchants can highlight potential errors to the customer early on, and payment providers should provide this functionality. This could be an invalid expiry date, an incorrect digit in the card number or incorrect CVV number based on card type. When issues are only flagged at the end of the process, this forces the customer to go back through the steps to figure out the error. Real-time signposting of problems removes this potential friction and reduces the potential for a declined transaction.

 

Ensure seamless security

Merchants should work with a payment partner who offers the right blend of security and compliance management without it coming at a cost to the end-to-end checkout experience for the user. Instilling trust and security in your checkout flow while utilising the right solutions to drive seamless authentication flows will increase customer confidence and help prevent drop-off.

The greatest level of security and control comes from either utilising hosted payment fields that the
merchant can natively integrate into their checkout flow, or a hosted payment page where they can
manage the look and feel. Showcasing your brand on the checkout page with trust signals and logos also adds to building trust with the customer.

Staying ahead of regulations is also important. Secure Customer Authentication (SCA) will soon be mandatory in the UK for all eligible digital transactions, and this doesn’t have to be a friction-full process. Tools like Transaction Risk Analysis (TRA) and Exemption Optimisation Service (EOS) can quickly score transactions and drive exemptions where there is the right blend of transaction risk.

 

The devil is in the details

These three rules for successful ecommerce checkout experiences may seem straightforward, but it is important to apply them at a micro level. It can take only one minor point of friction to cause a customer to abandon their cart, and this will inevitably be replicated across other similar customers. It is critical to identify friction points early on and anticipate customer needs throughout the process. Discussing these points and any opportunities to improve customer checkout experience with your ecommerce team and payment provider is an important first step towards ensuring your entire shopping experience remains competitively seamless and loyalty is won. It may be that your payment provider cannot address them, in which case it could be time to move on in order to stay competitive.

 

Continue Reading

Magazine

Trending

News20 hours ago

FINTECH COMPANY PAYEN CHOOSES AQILLA FOR ITS LIMITLESS SCALABILITY AND SUPERIOR MULTI-CURRENCY FEATURES

Payen is a fast-growing FinTech company that provides gateway Payment and FX services to online merchants. Having launched in 2010,...

Business20 hours ago

THE ACCELERATION TOWARDS A MOBILE FIRST ECONOMY

By Brad Hyett, CEO at phos   Over the last year, we have seen a big shift towards contactless payments....

News20 hours ago

NEW RESEARCH REVEALS KEY ROLE OF KYC COMPLIANCE IN DRIVING CUSTOMER LOYALTY, ADVOCACY AND NEW BUSINESS

The impact of financial crime for institutions goes beyond crippling fines   A piece of original research conducted by RegTech...

Business20 hours ago

HOW MERCHANTS CAN IMPROVE THE ONLINE PAYMENTS EXPERIENCE

By Alan Irwin, Senior Director of Product at Global Payments UK   The dramatic increase in online shopping over the...

Business21 hours ago

JUMP-STARTING PROCUREMENT TRANSFORMATION WITH A CLEAR AND REALISTIC PLAN

by Alex Klein, COO at Efficio Consulting   Following a period of ongoing economic uncertainty, business spend has risen high...

Finance21 hours ago

NAVIGATING FINANCIAL SERVICES IN 2021: LOW-CODE TO THE RESCUE

Nick Ford, Chief Technology Evangelist, Mendix   Financial services are the poster child of great digital transformation: today, Britons can...

News21 hours ago

PAYSAFECARD AND NEO EXTEND THEIR SUCCESSFUL PARTNERSHIP

paysafecard, a market leader in eCash payment solutions, and NEO, one of the most successful FIFA teams in the world,...

Finance21 hours ago

WHY THE NORDICS WILL CONTINUE TO LEAD THE WAY IN DIGITAL PAYMENTS

Kriya Patel, CEO, Transact Payments   While the recent introduction of PSD2 — the second iteration of the EU’s Payment...

Banking2 days ago

COMBINED RISE OF M&A AND CYBER RISK CREATES STORMY SEAS FOR INVESTORS

UK organisations carrying out merger and acquisition (M&A) activities must improve pre-acquisition due diligence of software vulnerabilities By Philippe Thomas,...

News2 days ago

PPRO CLAMPS DOWN ON FINANCIAL CRIME RISKS, PARTNERING WITH AND INVESTING IN AI-DRIVEN TRANSACTION MONITORING STARTUP SENTINELS

PPRO, the leading local payments infrastructure provider, has today announced a strategic partnership and minority investment in Sentinels, Europe’s leading transaction...

Business2 days ago

EMV® IN TRANSIT: WHY AND HOW?

Taoufik Sakhi, Smart Mobility Technical Advisory Director at Fime   Today, contactless cards provide a fast and frictionless payment experience,...

News2 days ago

INSTANDA ENTERS THE MIDDLE EASTERN MARKETPLACE

INSTANDA expands global footprint by working with new client, NewTechMe  First product distributed in the Middle East  Announcement signals INSTANDA’s understanding of NewTechMe’s vision to drive digital transformation in UAE...

News2 days ago

RGU LEADS EUROPEAN INTER-REGIONAL NORTH SEA PARTNERSHIP TO HELP HOMEOWNERS IMPROVE ENERGY EFFICIENCY

NB: Image from left to right includes:   Mike Bauermeister, Kishorn Insulations, Jamal Alabid, RGU, Amar Bennadji, RGU, Richard Laing, RGU,...

News2 days ago

JUMIO APPOINTS JENNIFER N. HARRIS TO BOARD OF DIRECTORS

Addition of veteran CFO comes amid period of record growth and product expansion at Jumio   Jumio, the leading provider...

News2 days ago

WISE LAUNCHES ASSETS, YOUR WISE ACCOUNT INVESTED IN THE WORLD’S LARGEST COMPANIES

Assets offers current account flexibility, with the potential for investment returns Wise, the global technology company building the best way...

Finance2 days ago

A CHECKLIST FOR RETRENCHMENT READINESS

By Shelley van der Westhuizen, head of financial well-being strategy & applied research at Alexander Forbes   Your health may not...

News2 days ago

EQUIDUCT LAUNCHES TRADING IN EXCHANGE TRADED FUNDS FOR RETAIL INVESTORS IN EUROPE

Equiduct will offer 436 ETFs and ETPs for trading through Apex   Equiduct, the pan-European retail exchange, announced today that...

Finance4 days ago

THE IMPORTANCE OF MANAGING DATA RISK IN THE FINANCE FUNCTION 

Written by Steph Charbonneau, Senior Director of Product Strategy, Vera by HelpSystems     CFOs and financial controllers play a pivotal role in how organisations evaluate and manage...

Business4 days ago

THE DEMAND FOR BETTER B2B PAYMENTS

By Brandon Spear, CEO, TreviPay   Business-to-consumer (B2C) payments started adapting to digital processes when consumer shopping habits began shifting...

Finance4 days ago

HOW TO BUY USDT AND AVOID THE HIGH VOLATILITY OF CRYPTO

Understanding and breaking down all the different types of crypto can feel like a huge task—there are so many variations...

Trending