Fraud prevention requires constant vigilance in order to stay ahead of emerging fraud trends. Here are 5 ways you can protect your business from fraud attacks in 2021.
Online and card-not-present (CNP) transactions have increased during the COVID-19 pandemic. Experts predict this trend will increase by 21 percent in 2021. By 2040, CNP payments will reach 95 percent.
While online buying is very popular, it increases fraud risk. In 2020, CNP fraud costs companies $35.54 billion worldwide.
With the threat of payment fraud accelerating faster than ever before, it's important that you stay up-to-date with the latest fraud prevention trends so you know how to protect your business. In this article we look at the five fraud prevention trends to keep top-of-mind in 2021.
The Five Fraud Prevention Trends of 2021
While this list isn't a comprehensive look at the fraud prevention landscape of 2021, these are the five trends that we predict will become pivotal in the fight against payment fraud.
1. Using Smart Authentication
Build smart authentication functions into payment protection plans. Transparent data collection increases information about the user’s device. State-of-the-art platforms combine supervised and unsupervised machine learning to check trillions of data points for each transaction. This allows businesses to make more accurate decisions about customer validity.
2. Using a Multilayered System for Payment Checkout
Intentional chargeback fraud gives monetary refunds to criminals. They use stolen card information or reroute product deliveries. This causes companies to lose money on sales that had no real problem.
Use a multilayered checkout approach such as:
- Address verification services
- Chargeback fraud alerts
- Confirm email addresses
- eCommerce plug-in tools to confirm purchases
- Reverse phone number lookups
- Confirm billing and shipping addresses
- Biometric validations like device fingerprinting
- Limit buyer velocity on purchases
- Card verification value (CVV) security codes
Many Point of Sale (POS) systems include transaction verification. Take care when collecting, checking, and acting on data received during a sale to ensure the transaction is legitimate.
3. Ensure Proper Use of Autofill
Many customers enjoy using autofill when buying online. They don’t have to enter the same information or get their credit card.
Increased simplicity makes it easier for hackers to capture and use data. Incorrect form use may cause company or customer mistakes and increase cart abandonment.
Errors can lead to incorrect checkouts and chargebacks. Security measures may increase the checkout process difficulty causing customers to leave.
Thus, look for a payment platform that’s both secure and user-friendly.
4. Prepare for Strong Customer Authentication (SCA)
SCA mandates of the European Union’s Revised Payment Services Directive are coming. Other countries are now writing their own SCA requirements. American businesses should expect similar rules in the future.
Learning about SCA criteria puts you ahead of the game. The SCA requires the use of at least two of the following independent authentication factors:
- Knowledge: something only the customer knows like a PIN, password, or challenge answer
- Possession: only the customer owns this, like cell phones, “device-bound” internet browsers, or credit cards
- Inherence: a customer’s biometric marker such as a fingerprint
The business must provide payment companies with these factors. They can decline payment if the data doesn’t meet their requirements.
5. Increase Customer Account Takeover Protection
Account takeovers occur when criminals grab customer data and access victim’s accounts. Customer trust in your security measures increases loyalty. Decrease risks using a holistic, risk-focused identity and device authentication solution.
Deploy systems where customers provide multi-level authentication easily and block hackers. Look for end-to-end fraud management systems that decrease your staff’s manual processing.
The system should conduct quick investigations and give the staff accurate decisions. This decreases false denials for valid customers and stops criminal transactions.
Are You Ready to Fight Fraud in 2021?
Payment fraud prevention is now a problem that more and more businesses are having to dedicate their time and resources to solve. Vesta, a global fintech pioneer in account and payment fraud protection, might be the solution provider you're seeking.
Our platform protects against CNP fraud, account takeover, and reduces user friction. Find out more about our solutions and the 100% Chargeback Guarantee today.