The COVID-19 pandemic has fueled a sharp rise in eCommerce sales as consumers steer clear of stores and shift their shopping habits online. However, with this increase, there has also been a huge jump in fraud. The latest figures from ACI Worldwide Inc. reveal that global e-commerce transactions rose 19% in July, while the average ticket fraud jumped to $10 from January through July 2020.
And this trend is expected to continue long after merchants reopen their doors and restrictions on crowd sizes are lifted. “As more brick-and-mortar stores reopen with Covid-19 restrictions, we are seeing card-present transactions slightly increase. However, we expect the e-commerce trend to continue post-COVID as consumers experience the convenience and speed of digital payments,” says Debbie Guerra, executive vice president for Naples, Fla.-based ACI Worldwide.
All COVID-19 has done is accelerate this trend and highlight the growing need for greater security. What would have happened years from now is simply happening in a matter of months. As businesses scramble to manage and boost their online presence, they are also having to get to the bottom of fraud and find ways to prevent it.
Safeguarding Your Business from Fraud
So, what does the jump in fraud values stem from? The pandemic has shifted consumer’s spending habits. They are typically spending less per order, and they are purchasing materials for do-it-yourself projects, apparel, alcohol, digital downloads and gaming. The area that has been hit hardest by fraudsters are the higher-value items like electronics and luxury-brand names.
Businesses have also had to pivot to meet customer’s needs and stay competitive during these uncertain times. The newer sales channels they have turned to – curbside pickup and parking-lot pick-up – have also been targeted by fraudsters taking advantage of new processes.
- Reinforce a fraud awareness culture – In these unprecedented times, making sure everyone understands the risks related to business changes is paramount. Make sure your entire team understands what they should be looking for and how to handle confidential information (especially if they’re working from home).
- Lookout for BEC – Business email compromise (BEC) is a huge threat to businesses during this time. This scam targets both domestic and foreign businesses that regularly perform payment transfers. While this scam has been used for some time and has always been a big threat to organizations, fraudsters are really doing their best to leverage the pandemic to their advantage.
- Investigate payment changes – One of the most important things to know is how your business normally processes money movement requests. Consider any account changes or irregular money movement as a threat, validate payment request changes using known source information, and maintain payment fraud prevention.
If you’re worried about safeguarding your business and customers’ information, consider securing a high risk merchant account. A high-risk specialist can help you secure the chargeback protection program you need to be proactive and safeguard your business from fraud.