Fight Online Payment Fraud Without Compromising Your Checkout

How do you fight fraud without compromising your Checkout?

Well, a fair few businesses have learnt the hard way. Take Target, eBay and the PlayStation Network, for example. These international businesses all have thing in common: they’ve all been hit by some of the biggest data breaches in history. The breaches meant that millions of people had their personal information land directly in the hands of cybercriminals.

This has wide-ranging consequences. In 2015 alone, credit and debit card fraud set the global economy back by US$21.84 bn.

There’s plenty of conversation about the changing shape of payments, but as how we shop and pay continues to shift, so does the fraud landscape. Fraud has become more sophisticated and remaining a few steps ahead of fraudsters – offline and online – can feel daunting. But there’s a lot at stake:

  • Last year, Australians made 8.1 bn card transactions, totalling $1,869,356,988,350
  • Fraud accounted for 0.07%, totalling $1,308,549,892

Rapid innovation in the payment technology space, especially in the mobile sphere with the uptake of digital wallets and sophisticated shopping carts has changed the shape of eCommerce and created new avenues for fraudsters to breach and access sensitive card data.

What does online fraud currently cost Australian businesses? Last year, the total amount was $175.6 Million, a significant 28% increase from 2015.

This increase is in alignment with the evident increase and popularity of online shopping. As we spend more online, fraud activity will also rise. However, despite these alignments, there’s no denying that fraud is on the up. Domestically, fraud has risen from $136.8 Million in 2015 to $175.6 Million, and overseas, fraud on Australian cards has risen from $226.3 Million in 2015 to $242.1 Million.

Following a new bill passed by Parliament in February 2017, organisations will soon to obliged to report serious data breaches to the Australian Information Commissioner. This type of progress is to be encouraged on a national level, as it’ll filter down and ensure that more and more people get serious about online fraud across a wide range of businesses and industries.

Card payments come with a unique set of challenges

For the Australian consumer, and therefore the Australian businesses, credit and debit cards sit in priority payments position. 85% of Australians say its their preferred payment method and the transactional stats back it up. However, online fraud accounts for 82% of all fraud on Australian cards.

The connected Australian shopper

As consumers become more and more connected, using multiple payment channels to pay for goods and services, this opens up the likelihood of being a victim to online fraud. Let’s look at how and why:

  • 87% of Australians are online and 67% shop, or pay, online
  • 72% of consumers use mobile devices for payments
  • 48% of consumers make payments via mobile at least once a week
  • 22% of payments are made via eWallet

Australia is set for further eCommerce boom

With a GDP per capita of $88 thousand, Australians have significant purchasing power and disposable income. On top of this, the eCommerce market is expected to surpass $24 bn this year. There's a lot of money to spent!

By 2020, forecasts estimate that online shopping will have doubled since 2015 and will account for 14.6% of all retail sales. This trend is clearly reflected in the Australian market, where online spending is growing five times faster than traditional retail spending.

Avoiding online fraud without compromising your Checkout

In today’s connected world, it’s important that businesses accepting payment fight fraud and not customers. Using tools that recognise genuine custom over fraudulent activity will save time, money and conversions. This means that legitimate transactions won’t be refused and you can streamline revenue.

Working on a transactional level, Bambora offer superior, real-time risk prevention. We offer our customers access to highly accurate verdicts on all payments transactions across all their payment channels. This includes access to our expert risk analysts and our self-service business intelligence portal and advanced fraud tools like device ID fingerprinting and geo-location targeting. Other ways we help customers fight fraud include, but are not limited to:

  • 3D Secure
  • CVV verification
  • Tokenisation solution
  • Contact Centre solution
  • PCI solutions

Understand your business’ PCI scope

PCI compliance is a universal security standard that defines how organisations should collect, store, process and transmit cardholder data safely and prevent fraud. Check out one of other latest blogs for a clear overview on PCI compliance and how it might affect your eCommerce business.

At Bambora, our job is to make it easy for companies in Asia-Pacific to protect their valuable customer data by using the latest and best industry standards. One of the biggest myths to debunk in the payments industry is that PCI compliance looks the same across businesses or isn’t needed if you’re using a secure payment gateway. If you accept just one card transaction in a year, your business will need to be PCI compliant. And while using a secure payment gateway is fantastic, it doesn’t automatically make you PCI compliant. Your business’ operations and systems will dictate what kind of PCI compliance solution you’ll need; maybe you accept phone payments as well as online payments? In which case, you may need to look into a secure, PCI compliant contact centre solution.

Common examples of where PCI compliance is needed:

  • Shopping carts and payment apps
  • Card readers
  • Point-of-sale systems
  • Wireless access routers
  • Systems that store or transmit payment card data
  • Paper-based records like receipts 

The final word on fighting online fraud 

When it comes to online fraud, protecting your business, customer and conversions is paramount. Being and remaining prepared is everything. 

Usually, they're right next to you

Most fraudsters are closer than you think. The most common perpetrators are business insiders, with 36% of fraudsters attributable to company management. 

Industry matters 

There's been an 8-fold rise in the value of frauds carried out against financial institutions, although government agencies and investors are still the likeliest victims. 

State matters!

Queensland has cemented its unwelcome title as fraud capital of Australia with 55% of all fraud reported being from the Sunshine State. 

Better connected?

22% of fraudsters use technology - including for credit card fraud - to hack into financial systems, including the use of fake adverts and the creation of regular electronic transfers and online betting accounts to launder money. 

Keen to hear more about online fraud and learn about Bambora's anti-fraud systems and tools? Don't hesitiate to get in touch with one of the team today. 

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 About the author: Victoria Galloway is Bambora APAC's Technical Copywriter, and has been writing and producing in the payments and eCommerce space for a number of years, both in the UK and Australia

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