News coverage on data breaches and rising fraud rates in online commerce are steadily increasing. At PAY.ON we believe that it is the responsibility of the industry to offer detailed information on the topic of fraud prevention. On 24 February 2014, we therefore hosted the first Fraud Prevention Day in Munich. Our presenting partners were the international fraud experts ReD, arvato infoscore, Cardinal Commerce as well as the Merchant Risk Council plus insparx GmbH, illustrating the merchant point of view. In this post we want to summarize and share our learnings from the great expert event on fraud prevention.
Fraud Managers are the Revenue Managers of the Future
In 2012 acquirers, issuers and merchants lost $11.27 billion due to fraud. With the total volume of online transactions processed worldwide set to reach about $2 trillion by 2016, a fraud loss of only 1% would lead to $20 billion of missing revenue. Looking at those numbers fraud managers are becoming the revenue managers of the future and some payment service providers/independent sales organizations and merchants have already started moving fraud management into their sales team.
Omnichannel strategies can help fight fraud
Fighting fraud, omnichannel strategies are the future. Recognizing shoppers across all channels and generating unique customer profiles enable to uncover fraudsters immediately.
Industry needs to collaborate to fight fraud
For the industry the prevention of fraud in online and mobile transactions has to become a collaborative approach. Combating fraud can only succeed if all players work together collectively with their specialized expertise merged and accelerated. Platforms and events of knowledge transfer, like the CBEC or the PAY.ON Fraud Prevention Day, can help the industry to fight the increase in groups that conduct fraud on an extremely professional level.
Over 50% of merchants believe fraud is inevitable
For payment service providers/independent sales organizations especially, this means that they need to support their merchants in fraud prevention by installing immediate support set-ups, informing and educating proactively and providing merchants with detailed data on fraud. “It is all about communication” was the main tenor from the merchant representatives throughout the whole event. And it appeared that it is also due to the information gap that 53% of merchants think fraud is inevitable and that merchants are more concerned with a friction-free consumer experience than with fraud management.
Mobile will keep us busy
In 2013, the mobile payments segment accounted for 19.5% of all transactions, a growth of 55% year-over-year. 7% of all shoppers using mobile payments to make a purchase did so via a mobile wallet, especially those based on Near Field Communications (NFC) technology. As mCommerce is growing, so is mFraud. Customers using a mobile gateway account for 4.8% of volume and 5% of total fraud. Taking this fact into consideration already today is very important, since mobile will keep us busy.
PAY.ON’s Fraud Prevention Day 1.0 – a great expert event
After great expert insights and fraud prevention product presentations all the participants and partners’ joined a networking event and dinner for knowledge transfer and intercommunication. Everybody left with great input and many new approaches on how to manage fraud without affecting conversion rates and thus revenues.
Thank you again to all participants and our partners for a great event. For those who couldn’t attend, the event was live covered on Twitter via the hashtag #fraudPD.