Escalating Rates of Digital Payment Will Lead to New Fraud Risks

As payment providers offer businesses and their customers more ways to pay, over 60 percent of retailers, banking institutions and financial-tech providers anticipate more similar solutions in the coming two years.

Those facts and figures are lifted from a recent Forrester Research Inc. study. This research was sponsored by Visa and was meant to analyze the overall danger of new payment systems and awareness among businesses, large and small.

Forrester Inc.’s survey, completed in March, interviewed 566 experts worldwide. The group contained 1/3 of experts from each of these categories; merchants, financial-tech providers, retail banking institutions—as well as acquirers.

Significant Findings According to the Official Report

Of the group interviewed, 45 percent predict that over-the-web and mobile device payments will go up.

The interviewees also feel small businesses will follow suit as many of them will offer a blend of solutions such as credit cards, debit cards, and digital payments

But Forrester is warning that the increased adoption of digital payments will expose industry players like merchant acquirers and banking institutions to new fraud risks.

Over half (60 percent) of those interviewed in the poll were concerned that new payment tech exposes them to new cybercrime risks.

“One negative aspect of this progress in payment tech is that as the industry gets more inventive, cybercriminals look for new loopholes,” said Forrester. “Businesses, large and small, are on the alert of the new fraud dangers that come with implementing innovative payment systems.”

The researcher also sought to understand how concerned businesses were about fraud risks in mobile banking bill transactions. An entire 69 percent said they were very concerned.

Likewise, 62 percent were also concerned that fraudsters could target digital wallets and mobile wallets. Fifty-nine percent felt the same for peer-to-peer payments.

Business Advised to Combat Fraud with a Blend of Tools and Strategies

Forrester advises companies to fight fraud linked to the new forms of payment using a blend of the many available tools and methods.

A smart approach is to implement AI (artificial intelligence) and machine learning systems to study payment data and spot possible fraud. Tokenization and adding fraud-control systems can also make it easier to detect fraud before they happen.

 Lastly, the researcher recommends that businesses use advanced authentication methods to view fraud control as a continuous process and not a one-time initiative.

Author Bio : Payments expert Blair Thomas is the co-founder of  #1 high-risk processor eMerchantBroker. He’s just as passionate about helping businesses get chargeback protection as writing at home in his sunny southern California home.

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