Consumers are liking curbside pickup of their online orders at their favorite merchants. Trouble is—payment card fraudsters are liking it even more. The card-not-present (CNP) nature of the transaction makes it a favorable play for fraudsters to use stolen card data to make an online order. Then they race to the store for the pickup before their dirty work is discovered.
Merchants must become smarter about using better fraud detection solutions for all e-commerce transactions. Until they do, BOPIS fraud will increase as seen by recent data from ACI Worldwide.
The following excerpt from a Total Retail article reports more on the topic:
The pandemic has accelerated the rise of many existing trends over the past year, one being the buy online, pick up in-store (BOPIS) delivery channel. For merchants that already had this option available to consumers prior to the pandemic, transactions through this channel increased 70 percent by volume and 58 percent by value in 2020, according to ACI Worldwide data.
In 2021, the BOPIS trend is expected to remain post-pandemic, though the success of it is highly dependent on the strong fraud measures that merchants put in place. ACI’s data showed that BOPIS fraud has seen a significant increase since the pandemic, with a 7 percent fraud attempt rate compared to 4.6 percent with other delivery channels. BOPIS has been as beneficial to fraudsters as it has been to genuine consumers.
Fraudsters take advantage of the short window between purchase and collection and avoid Chip and PIN or Signature verification. With changing customer and fraudster behaviors, plus the increased risks that come with greater digitization, merchants need to work intelligently and more proactively in 2021 to optimize conversion rates while accurately blocking fraud.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
