The COVID-19 crisis is driving the global growth of e-commerce sales — and of online fraud.
Transaction volumes in most retail sectors experienced a 74% rise in March compared to the year-ago period, while online gaming has seen a staggering increase of 97%, according to an analysis by ACI Worldwide of hundreds of millions of transactions from global online retailers.
Fraud is also on the increase, with fraudsters using the surge in online activity to target unsuspecting consumers and merchants, the research revealed. Merchants are starting to experience dramatic increases in COVID-19-related phishing activities, with stolen credentials released into the e-commerce payments chain, as well as increased friendly fraud activities.
Here are some key findings from the ACI report.
• The online retailer sectors with rising transaction volumes in March 2020 compared to the year-ago period include home products and furnishings, up 97%; do-it-yourself products, up 136%; garden essentials, up 163%; and electronics, up 26.6%. [Does not include food sales.]
• Average fraudulent attempted purchase value increased by $36 in March, driven by electronic and retail goods. This corresponds to a fraudulent attempted transactional value increase by 13%.
ACI provided the following tips to retailers to maintain security during the COVID-19 crisis.
• Maintain security and deliver a great customer experience, as consumer purchasing behavior—both genuine and fraudulent—has changed. For example: Express shipment and buy-online pickup in-store delivery methods in the last two weeks havetripled,making transaction decision speed and accuracy critical.
• Use customer profiling and time-on-file techniques to maintain the customer experience for valued customers and ensure good transactions are still accepted.
• Expect an increase in friendly fraud chargebacks as a result of growing financial difficulties among consumers. Friendly fraud occurs when a cardholder receives goods, but denies making a purchase, or a family member makes a purchase without cardholder approval.
• Monitor systems and update as necessary. Business intelligence tools and real-time monitoring lead to immediate decisions and responses. Employ rapid access to fraud intelligence to inform rules changes in real time.
• Engage frequently with web and mobile site security management. Give these teams the tools, techniques and procedures to detect, contain and mitigate botnets. And considering the presence of both good and bad bots, put business policies in place to address this issue with clarity for both teams.