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Looking back, we can say with some confidence that the festive period of 2017 was a huge success across the world of online retail. Yet again, the global eCommerce marketplace saw existing records broken left, right and centre thanks to the Christmas rush as well as the now unmissable splash-some-cash days of Black Friday and Cyber Monday – but is there actually cause for concern on the horizon?
Fraud – something that many of us will have experienced in some capacity during our lifetime – seems to be rearing its ugly head as we move into 2018. CNP (Card Not Present) fraud, in particular, grew dramatically during last year and actually began to appear across industries and markets that have, until now, remained largely untouched.
We wanted to take a look at fraud and how it currently affects the global eCommerce market, but in particular, what trends seem to be appearing globally – as well as throwing in some predictions of what the future of fraud holds for the online marketplace, so here goes!
Prediction 1 – So-Called ‘Safe’ Industries Will Become Targets
As 2018 continues, it’s clear to see already that fraudsters are going to greater and greater lengths to facilitate their attacks. This year is likely to be the year that online fraud begins to spread and diversify across more industries than ever before.
When we look at the data, last year was a pretty awful one for the travel industry – the rate of fraud in this market went up by nearly 4% in 2017 alone. This puts it some way ahead of the rest of electronics, cosmetics and the fashion industry also succumbing to increased fraud, but only by around 1% respectively.
Travel is a tough one, and it’s also an industry that is likely to remain a target for fraudsters for the foreseeable future. Not only do fraudsters seem to still have success here, they also know that the cut-throat competitive nature of the industry means orders are processed quickly due to fluctuating prices – merchants don’t have the ability to stop, draw breath and spot clear data anomalies like they can in other marketplaces.
Also, travel is notorious for genuine data mismatches to occur frequently, where customers are booking in for their family, friends or work colleagues.
Unfortunately, other industries could be about to follow suit. The prevalence of easy to access cheap cards is likely to see CNP fraud boom this year in markets like food delivery, restaurants and taxi services. Fraudsters interacting on the ‘dark web’ can easily pay a small fee for personal details, load up a card and simply use it for everything until it’s cancelled.
Prediction 2 – Cryptocurrency Won’t Impact eCommerce – For Now
2017 was definitely the year that the world sat up and took notice of cryptocurrency, in particular, the explosion in share price behind Bitcoin.
It’s true that a small number of businesses were able to take advantage of this, accepting payments in this form to ride the hype wave. The benefits of doing this are plain to see – cryptocurrency is almost immune to fraud in the sense that organisations don’t have to worry about the possibility of impersonation as the blockchain ledger takes care of this.
However, it’s unlikely that accepting cryptocurrency as a payment method will solve the problem of CNP fraud, at least not in the near future. At the moment, Bitcoin and similar ICOs are still in their infancy and there are quite a few hurdles to jump before shoppers can buy their goods with cryptocurrency regularly.
For example, the lack of transactional third parties makes it very difficult for the eCommerce world to embrace this payment method. If a customer mistakenly pays the wrong amount or wrong merchant, that’s the transaction over – there’s no chargeback system in place. If the online shopping world is built on a foundation of trust, cryptocurrency has little chance of entering the mainstream until the public fully understands it; something that will likely take years.
Prediction 3 – Premium Delivery Options Will Get Safer
With our already busy lives seemingly getting busier, the global shift from consumers to a universal approach to shopping continues. We want our orders processed within minutes and our deliveries instantaneous, which nowadays means next-day or even same-day delivery.
Omnichannel shopping options are growing in popularity and customers now have more choice than ever for the way in which they collect or receive their items. Amazon continues to set the standard for all retailers and has proved that premium delivery options are a way of gaining a competitive edge. Who doesn’t want same-day delivery?
Ironically, fraudsters in years gone by loved fast delivery – at the end of the day, it’s not their money they’re spending. However, as genuine customers have also had their interest in speedy delivery peaked, the fraudsters reign appears to be over.
There was a 4% increase in legitimate requests for next-day or same-day delivery, diluting the possibility of fraud, increasing scrutiny and ultimately driving online criminals away. They aren’t gone completely of course; these trends tend to move slowly, but we are definitely moving towards a safer global delivery marketplace.
Prediction 4 – Fraud Will Get More Sophisticated
It’s actually quite a scary proposition when you think that the global fraudulent community is actually incredibly professional and meticulous in their attempts. They aren’t amateurs by any stretch of the imagination – an underground dark ecosystem of criminals are creating guides and even seminars aspiring fraudsters can join to ‘learn the ropes’.
Recent times have seen an unprecedented rate of innovation in online fraud techniques, with 2017 the year of the account takeover – a sophisticated version of CNP fraud whereby the target’s entire account is accessed including address, contact details and (of course) the money. Exact figures for this type of fraudulent attack are difficult to put together due to the nature of the attempts themselves, but it’s safe to say they are on the rise.
Unfortunately, the professional fraudster network never sleeps – it’s constantly running behind the scenes and around the clock to identify new weaknesses in detection systems. Online security organisations and merchants themselves are working harder than ever to combat fraudsters and stay one step ahead, but a self-optimising fraud prevention solution is needed to give that guarantee of ongoing security.
Summary
There is every chance that 2018 will be the next in a long line of record-breaking years for the world of eCommerce, but the global fraud community stalks businesses like a lion in the savanna – give them any kind of opportunity and it could be game over.
There is every chance that 2018 will be the next in a long line of record-breaking years for the world of eCommerce!
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Our best advice is to stay on top of the latest fraud trends and always take the necessary steps to keep your store protected. Ignoring an important update or neglecting your site’s security could be all it takes to allow fraudsters in. Safety first and all that.