|March 22nd, 2021
The payment industry-leading expert Forrester has expressed that 61% of industry leaders and experts have found that new payment technologies can get more exposure to fraud.
Even trusting upon cyber security cannot be considered safe for comfort. As proven the studies have suggested that card-not-present fraud will significantly grow by 14% over the next four years.
What does the survey suggest about payment leaders ready to invest in tech for fraud and chargeback prevention?
As suggested by the reports, around 94% of industrialists have faced a rise in fraud attacks during the COVID-19 pandemic.
Nearly 83% of the people ranked fraud and chargeback prevention as the most crucial payment technologies.
The high-risk industry is highly vulnerable to chargebacks. Online businesses operating in this space are far more likely to witness a higher rate of payment disputes apart from other e-commerce sellers.
High-risk merchants do need to run their online business from legitimate chargebacks with good communication skills. It also includes describing products that clearly explain the refund policy, detailing recurring charges, and following promised shipping times.
These are also called payment processors, such as T1 payments. They also offer complete chargeback protection services.
According to the survey, nearly 55% of credit card testing fraud has single-handedly remained the top factor impacting the payment industry. The survey also stated that nearly 16% of the fraud arises from gift cards, whereas only 13% of the refund fraud has remained the top factor during the period.
Is the risk of stealing financial data increased more in recent times?
It has happened because of the rise of online shopping, which further led to fraudsters and hackers who can take advantage by stealing the data from consumers and merchants. Fraudsters use this type of method to obtain, steal, and purchase stolen credit card data and test them on unsuspecting merchants’ e-commerce websites by placing numerous small orders all at a time.
It further allows the scammer to evaluate the availability of credit cards. It leads to high-cost orders too.
Not one, but there are several tactics that merchants employ to prevent fraud, like credit card testing. It allows vendors to invest in an IP blocking and banning tool to remove the specific sources of fraud and prevent vendors from accessing the payment gateway in the future.
Social Commerce and Digital Payments Will Boom
It is predicted that more than 96% of people have expected social commerce and digital payments in the coming years. It is estimated that 57% of respondents do expect significant growth.
Many respondents do believe that buying software like Venmo can help in decreasing fraud.
In the field of digital payments, false chargebacks do carry devastating effects on the business. Therefore, one must take strict measures the prevention of chargeback instances. Thus, one can conduct proper identity verification and due diligence of customers even before transactions get completed.
Financial regulatory authorities like FATF have inducted strict KYC and AML regulations necessary for financial institutions and banks to follow.
Identity verification has been practiced for many decades, but the manual method is time-consuming. Thus, there are chances for human error to occur.
Why have verification systems been introduced in the digital payment gateway?
Due to innovations in the IT sector, artificial intelligence-based digital identity verifications have emerged in digital payments.
These systems verify customers’ identities from any corner of the world within just a few seconds. Businesses use different types of digital ID verification techniques.
One of the most impactful ways to remove the frauds from chargebacks is to facilitate barrier-free communication between consumers and digital gateway payments. It will help in minimizing chargebacks and refunds.