A new report from eMarketer shows that sales for the 2017 holiday season are expected to increase 15.8 percent from last year. As expected, mobile is continuing to dominate, yet many retailers still aren’t prepared to handle the influx of sales and the fraud issues that come along with card-not-present (CNP) transactions conducted online or via mobile, leading to problems that are nastier than the Grinch on Christmas Eve.
We know that retailers are already behind when it comes to fully protecting their mobile offerings. Factor in the additional negative effects of post-holiday season chargebacks, and the stage is set for merchants to be as vulnerable as Whoville this holiday season.
Chargebacks are a huge issue for merchants after a busy holiday retail season. And many merchants won’t know if they were victims of higher fraud during the holiday season until the end of Q1. By the time chargebacks get fully reported for the 2017 holiday season, merchants are 60-90 days or more down the road.
Not only will you have missed the chance to stop fraud, but an audit to identify the cause of that fraud will be expensive and difficult. In fact, it may
be impossible to learn enough from those aged transactions to prevent a future attack by the same methods.
Furthermore, the lag in chargeback reporting means your financial reports will show a distorted picture of your company’s performance. Those great sales and profits you thought you had in December could actually turn out to be ugly losses in February, March, and April and set you back in 2018.
Beware of These Common Fraud Schemes
Once a fraud system (one that incorporates all of the above monitoring tools!) is chosen, retailers should be aware of common schemes implemented by criminals. One of these methods is “card testing,” which is when a fraudster runs multiple transactions on one card as they try to validate stolen cards.
Another sign that fraudulent transactions may be in progress is if multiple transactions from different cards are coming from one single IP address. Having a fraud strategy in place will help merchants gain access to these data points and make it easy to identify and prevent risky transactions.
Mobile adoption, as well as the technologies designed to keep pace with increased mobile use, will continue to evolve, constantly creating new weaknesses on which fraudsters can prey. Along with conducting reviews of your payment and fraud systems regularly, merchants need to make it a priority to have the right tools in place that can detect and predict fraud before it happens, allowing more legitimate transactions to go through, and stopping fraudulent ones in their tracks.
If you neglect planning for a new level of fraud, don’t expect a happy ending with a plate full of Who ham!
Mobile Commerce Opens New Doors to Fraudsters
Most online merchants look at mobile commerce as a new and exciting way to allow customers to shop, connect and buy products on the go. The rapid growth of mobile devices globally though, has opened new doors for fraudsters.
Fraudsters now have more ways to access goods and services, mask themselves, and attempt to steal from you or disrupt your business. Unlike traditional browsing and access via a computer, mobile devices introduce many new elements that complicate the user verification process. Make sure that your fraud detection software has specific features to combat fraud from all types of mobile transactions including mobile devices, wallets, apps and more.