June 29, 2015
Americans are making more purchases online and on their phones than ever before...
And many of those purchases are strictly digital—products like e-books, gift cards, and event tickets—with instant delivery to the consumer. For retailers, it’s becoming increasingly necessary to offer digital goods and online sales options in order to compete.
This new retail landscape, however, has also opened up new opportunities for fraud. Online and mobile purchases don’t require a physical credit card, so card-not-present (CNP) transactions are often more vulnerable to scams. Additionally, consumers expect to receive their digital purchases immediately, which leaves retailers with less time for identity and payment verification.
These factors and vulnerabilities have led to the creation of an entirely new category of fraud: Fast fraud. Fast fraud occurs when perpetrators take advantage of weaknesses in online and mobile commerce fraud prevention systems to steal digital goods, which can then be re-sold on the secondary market. Other fraudsters hack into retailers’ systems and swipe customer credit card information for use or sale on the secondary market.
As online and mobile commerce continue to grow, fast fraud is expected to become increasingly prevalent. Fortunately, there are steps retailers can take to better protect their business, their data, and their customers from fraudsters.
To protect themselves from fast fraud, retailers need to find a solution that is specifically designed for the way consumers are shopping today and in the future. More specifically, retailers should look for a partner that will guarantee payments, meaning the vendor will assume risk for any approved transaction even if it turns out to be fraudulent—this means there’s extra incentive for them to get payments right every time. Retailers should also look for solutions that are effective at detecting fraud while also maintaining high payment acceptance rates and prov ...