Study: Online fraud continues to vex retailers
Retailers that have a digital presence continue to worry about how they will handle the increasing pace of e-commerce fraud.
Nearly half of all retailers (including two-thirds of the largest segment) worry about their systems’ abilities to handle increased e-commerce fraud as a result of data breaches, according to “Fighting Fraud in the E-Commerce Channel: A Merchant Study,” a report from the Federal Reserve Bank of Minneapolis.
According to data, e-commerce fraud is expected to increase over the next six to 12 months, and these incidents will largely stem from data breaches. More than three-quarters of retailers expect e-commerce fraud attacks to climb in next six to 12 months.
The top three drivers of e-commerce fraud attacks are data breaches; e-commerce growth, and targeted attacks. However, retailers of all sizes named card-not-present (CNP) as their most feared fraud threat. This was followed by in-person card fraud at the point-of-sale.
Currently, no single fraud tool was used by more than 76% of respondents, which suggests high fragmentation. A multi-layered approach is the norm among retailers’ fraud fighting arsenal, as nine out of 10 retailers employ two or more tools to fight fraud in the e-commerce channel. However, the most used fraud mitigation tools in the e-commerce channel are security codes and shipping address verification.
The top fraud mitigation tools that retailers plan to adopt in the next six to 12 months are encoding protocols designed to further secure online CNP transactions (including 3D Secure, Verified by Visa, and similar systems) (14%); purchase velocity checks (11%), and geolocation, a technique that identifies anomalous transactions (10%).
While usage of emerging fraud mitigation technologies is low, confidence is high among users of artificial intelligence systems, facial recognition and voice recognition. Further, large retailers (companies with sales exceeding $1.5 billion) who use behavioral biometrics rate it high in effectiveness.
Over half of retailers surveyed rely on processing systems from third parties to fight e-commerce fraud. Yet, only about one-third of retailers participate in an information sharing partnership to identify current fraud attacks and exchange threat information.
Overall, partnerships with payment card networks and third party processors have the greatest participation, and over half of the largest retailers participate in one or more information sharing partnerships. The Financial Services Information Sharing and Analysis Center (FS-ISAC) is top-rated in effectiveness, although several partnerships received high marks.
Study: Mobile wins the day for Father’s Day procrastinators
More last-minute Father’s Day shoppers reached for their mobile phones when purchasing gifts for their dads.
Mobile devices accounted for 45% of all Father’s Day orders, a jump from 38.8% last year, according to new data from NetElixir.
Smartphones also came in handy when it came to placing last minute orders. In fact, 30% of all mobile sales between June 4-17, happened in the last four days (June 14-17), despite the expiration of free shipping cutoff dates.
The top spending group also aged since last year. This year’s top Father’s Day spenders ranged between 35-44 years of age (27% this year compared to 23% last year), compared to Millennials who were the top spending group in 2017 (22% this year compared to 27% last year).
Despite the age group, Father’s Day shoppers spent 42% more this year compared to 2017. Men also outspent women by 26% this Father’s Day, according to the data.
‘Head tax’ battle reportedly far from over
Seattle repealed its per employee tax for big companies, however corporations, including Amazon, may still have a battle ahead.
The city rescinded its decision to levy a $275 tax per employee, per year, on companies with annual revenue of $20 million or more. However, more head tax programs could be in the works, reported Business Insider.
Seattle blamed an increasing homelessness crisis, on the big boom of office space occupied by corporations, including Amazon, Starbucks, and others. To rectify the situation, in May, Seattle’s City Council sought to impose a head tax, requiring large businesses to pay $275 per employee for the next five years.
According to the report, Amazon pushed back. In addition to threatening to halt construction of a 405,000-sq.-ft. office tower, the e-commerce giant also joined forces with other corporations to “quietly invest hundreds of thousands of dollars” into a signature-gathering campaign, called No Tax on Jobs, for a referendum against the tax on November’s ballot. Efforts forced the city to repeal the tax.
However, big business may need to keep on their game faces. Despite Seattle’s decision, multiple Silicon Valley cities are considering similar taxes, according to Business Insider.
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