Juniper: Retailers brace for $71 billion card-not-present fraud loss
With fraudulent card-not-present (CNP) transactions on the rise, losses will become staggering over the next five years.
Retailers stand to lose $71 billion globally by 2022, driven by a number of factors, such as the United States' shift to Europay, MasterCard and Visa (EMV) chip cards, delays in 3DS 2.0 (3D-Secure) and click-and-collect fraud. This was according to “Online Payment Fraud: Emerging Threats, Key Vertical Strategies & Market Forecasts 2017-2022,” a report from Juniper Research.
By 2022, fraudulent CNP physical goods sales will reach $14.8 billion annually. Click-and-collect services are particularly vulnerable, given the lack of a mandatory residential delivery address. Yet, retailers remain reluctant to impose rigorous identity checks on order pick-up for fear of damaging the consumer experience and reducing conversion rates.
Meanwhile, many merchants perceive combatting fraud as too expensive. Consequently, they have been ill-prepared to deal with the shift to online fraud following the introduction of EMV (chip and signature) payment cards in the U.S. In most instances however, merchants would receive value from their investment.
For those companies that are taking steps to fight back, three key battle-grounds are emerging in the fight against fraud. By 2018, machine learn-ing will emerge as a key tool in identifying genuine users. The increased shift to mobile e-commerce will also increasingly rely on 3DS 2.0, a mes-saging protocol to enable consumers to authenticate themselves with their card issuer when making CNP e-commerce purchases. Biometrics usage will also accelerate, the study revealed.
"2018 will herald the arrival of new tools in the fight against fraud", said Steffen Sorrell, senior analyst, Juniper Research. "3DS 2.0 will finally begin to rollout and will mark a paradigm shift in terms of merchants and issuers leveraging shared data. We also expect passive biometrics, such as the manner in which a device is handled, to become key in the future."
Subway digital chief heading to discount giant
Dollar General has tapped a fast-casual restaurant executive to lead its technology and fledgling online operations.
Dollar General Corp. announced that Carman Wenkoff will join the company as executive VP and CIO, effective July 10. He replaces current CIO Ryan Boone, who recently announced his retirement.
Wenkoff most recently served as CIO and chief digital officer for Subway restaurants, where under his leadership the information technology team created an innovative digital marketing platform and point-of-sale system, and many other integrated store technology solutions to help increase sales and profitability. Prior to that, he was part of the IT and management team at Subway restaurant’s franchisee-owned Independent Purchasing Cooperative and served as chairman of the Retail Gift Card Association.
“I am excited to have someone with Carman’s experience and digital expertise to be joining our team to lead this important part of the business,” said Todd Vasos, CEO, Dollar General, chief executive officer, which operates 13,601 stores in 44 states. “We continue to focus on enhancing our digital presence and meeting our customers when and how they decide to engage with us. I’m confident with Carman’s vision we will continue to strengthen these efforts as well as leveraging technology to improve our processes, lower costs and drive a better customer experience.”
Study: M-commerce growth helps shrink mobile user acquisition costs
Consumer reliance on mobility throughout their shopping journey presents a huge opportunity for retailers to engage shoppers.
This is according to “Mobile Shopping: User Acquisition Trends and Benchmarks 2017,” a report from mobile app marketing provider Liftoff. The study analyzed 26.9 billion ad impressions across 4.8 million app installs between April 2016 and April 2017.
According to the study, September was the strongest month to acquire users completing a first purchase ahead of the holiday season. Further, at an acquisition rate of $62.65 per shopper, September is 28.2% less expensive for user acquisition compared to last year. It’s also getting less expensive to acquire new mobile shoppers year-over-year, especially as users continue to grow more comfortable with using their phones, the report suggested.
The most engaged mobile buyers tend to reside in North America. Here, the market is mature as consumers rely on mobile shopping to enhance the commerce experience. But the competition is fierce as the install-to-registration rate is only 4%, indicating that app marketers need to be significantly smarter when approaching this audience.
In fact, North American users are the least likely to register across the geographies examined. However, they are more than two times more likely to move forward with a purchase. With a saturated app market, North American mobile users simply may be overwhelmed by the sea of apps to register for. Once they commit however, they are steadfast: North American users convert to an in-app purchase at a rate of 17.7%, the report said.
However, marketers should not discount APAC consumers, as they are not just window shopping. APAC users are making such strides in their online shopping habits that the install-to-registration rate in the region is 12.4%, nearly three times higher than North America, and right on pace with EMEA at 10.7%. Install-to-purchase rates are markedly higher than any other region, except the United States, at 8.6%.
Similarly, Latin American mobile users are more likely to register in a shopping app than in North America, EMEA and APAC, with an install-to-registration rate of 13.78%. However, of the four regions analyzed, Latin American mobile users are the least likely to move forward with a purchase.
And the difference between these shoppers is huge. Latin America is 95.5% less likely to complete a mobile purchase than North American consumers. The fact that users in Latin America register, but don’t continue through purchase, could be due to a less mature mobile commerce market or simply less comfort around the relatively new mobile shopping space, the report suggested.