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The past decade has seen some dramatic changes in the payments industry. Many of the same technologies, strategies and concepts that now dominate the market – mobile commerce, IoT, voice enabled commerce – barely existed in 2010. Although transformative, perhaps, the next decade promises even more progress in the market.

It’s almost impossible to keep up with the pace of e-commerce payment changes. This is a problem, because rapid innovation will inevitably lead to vulnerability.

New risk factors in 2020 and beyond

You are facing a trader before an uphill battle. You need to find a way to work every day while being informed about new technologies and sources of threats as you develop. It’s a difficult situation to navigate even under ideal conditions.

That doesn’t mean everything is bad. Exactly the opposite; new development can provide incredible opportunities to reach and attract customers, identify new revenue, and grow your business. For example, shopping online, downloading in-store or the BOPIS model is revolutionizing the way shoppers buy groceries and other goods.

However, as the market evolves, fraudsters develop their tactics to manipulate it. For example, the introduction of BOPIS into the food and beverage vertical has led to an increase in cost recovery for the industry in recent years. When merchants introduced ecommerce elements into their payment model, they inherited various issues such as fraud, cost recovery and consumer rights mentality (more on that below).

Without the right approach, revolutionary opportunities for profitability can fall victim to the advanced threats of e-commerce payment fraud:

  • Bank fraud opened: Bad actors manipulate the flow of data between banks and third-party service providers.
  • Misuse of BOPIS: Fraudsters take advantage of the fact that many locations do not require identification or payment confirmation to take orders.
  • Loyalty Points Theft: Loyalty points hold value like money, but are less strictly protected, which makes them hot targets.
  • Reimbursement of double trips: After an incident like the failure of a carrier, cardholders can file a refund and then claim compensation through insurance bonds.
  • Recurring Billing Scam: Subscription services are lucrative but highly susceptible to friendly fraud.

Consumer pressure is part of the problem

While new and evolving fraud threats are part of the problem, another problem is the new customer mentality. We have inadvertently trained them to create an ecommerce payment perception. Faster, more options, less friction, instant loan repayment … all combine to create a deceptive customer perception of the real dynamics of the market.

Customers today do not think about shopping the same way they used to. Banks, for example, are not only payment facilitators but also concierge services. Customers expect high security standards, fast processing and customized experiences with every payment. While retailers should strive to always provide better experiences, the pace of change is lagging behind customer expectations.

Banks could play a role in setting customer expectations. Instead, they decide to oblige them to ensure loyalty. The load is then shifted to your shoulders to meet these lofty expectations.

We should not choose between easy procedures that cause scam in the scam and overly strict standards that deter customers. Aside from the unique trends in fraud, this is what I really want to inspire home about the state of the market in the new decade: We need to strike a balance between experience and security.

Dynamic problems require dynamic solutions

According to a recent Kount survey, 42% of businesses that consider themselves to be “very digitally mature” have, however, refrained from digital innovation by worrying about e-commerce payment fraud. Fear is understandable, given what it is about. However, despite the continuing threats that the market faces, there are still opportunities to move forward without the rise of fraud.

The best approach is to take the time to develop a comprehensive and flexible strategy. In my opinion, a fundamental understanding of the problem is multilayered. This will guide you in developing a strategy that will consist of free tools to prevent fraud before and after the transaction. As mentioned, this strategy should be adaptable and able to evolve with new threats.

You will not be able to stop every fraud incident. New threats from time to time will inevitably catch you fearlessly. However, adopting a dynamic, comprehensive strategy will help you succeed in the new decade.

Monica Eaton-Cardone is the co-founder and COO of Chargebacks911

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