Online merchants continue to ride the rising tide of e-commerce sales, but fraudsters are getting in on the action as well. They’re using card-not-present (CNP) transactions and curbside pick-up to take off with the goods. Many retailers have expanded online order fulfillment options and store pickup has become popular with consumers not wanting to pay and wait for delivery.
So fraudsters take advantage of the quick turnaround time to place an online order and then show up at the store in the next hour to pick up their stuff. Machine-learning fraud detection models will increasingly help online merchants to thwart these criminal transactions.
The following excerpt from a Yahoo! News article reports more on the topic:
Global eCommerce transactions increased by 19 percent in July 2020 compared to July 2019, according to analysis by ACI Worldwide (NASDAQ: ACIW) of hundreds of millions of eCommerce transactions from global merchants. The data also showed that sales of outdoor items saw the highest year-over-year (YoY) increase from nine percent in 2019 to 12 percent in 2020.
Fraud continues to increase as criminals take advantage of card-not-present methods of payment, including buy-online-pick-up-in-store or click-and-collect methods. While fraudulent transactions by volume were slightly lower in 2020 (2.3%) compared to 2019 (2.6%), the data showed that fraud transactions by value were higher in 2020 (4.4%) compared to 2019 (3.7%).
“Fraudsters are targeting higher value items like electronics and luxury brand names, especially within newer channels such as curbside pick-up and in-parking lot pick-up,” said Debbie Guerra, executive vice president, ACI Worldwide.
“We continue to see a huge increase above industry averages in eCommerce sales year-over-year,” Guerra continued. “As more brick-and-mortar stores reopen with COVID restrictions, we are seeing card-present transactions slightly increase; however, we expect the eCommerce trend to continue post-COVID as consumers experience the convenience and speed of digital payments.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
