Payment Expert’s Top Tips for Staying Safe This Christmas

By Harald Walden, CTO at Brite Payments

Winter is here, and Christmas is fast approaching. Whilst it is the season for festive shopping, fraudsters are gearing up to exploit the winter rush for gifts by targeting sensitive financial data and perpetrating increasingly sophisticated scams. This can potentially cost businesses and customers much more than they bargained for.

Let’s explore how to identify and avoid the techniques fraudsters employ during this time, as well as how Pay by Bank can help mitigate fraudulent attacks during this end-of-year shopping surge.

Recognise the Surge in Phishing Scams and Fake Websites

Each year, the surge in online shopping attracts a wave of cybercriminal activity, with phishing scams and fake websites increasing dramatically in number and sophistication. These malicious tactics are designed to steal sensitive information by mimicking legitimate eCommerce businesses. In 2023, phishing attacks saw a 30% increase during peak shopping times like Christmas, targeting both consumers and merchants.

For businesses, it’s not just about protecting their systems; they must also be vigilant for any fraudulent sites mimicking their brand. Implementing secure website practices is crucial in safeguarding both their reputation and customer data. This can be implemented by offering new payment technologies, such as Pay by Bank, which allows consumers to make purchases without entering sensitive card details, significantly reducing the risk of data theft through fake sites or phishing attempts.

The Threat Posed by AI Supercharged Scams

The digital age has streamlined the shopping experience. Still, it has also brought with it a more volatile environment for both parties to contend with, which is directly exacerbated by the rise of AI. This sentiment is echoed in reports showing that 72% of British people are worried about falling foul of AI-enhanced scams.

It is easy to see why. Tell-tale signs, such as grammatical errors or spelling, can often identify a typical phishing scam. Still, AI has given fraudsters the ability to polish their malicious communications effortlessly.

Scams work not only by deception but also by generating a strong emotional reaction. This might be by pressuring the targeted person to take urgent action, prompted either by fear or a deal too good to be true. This is especially true during events such as the run-up to Christmas, where there is a heightened focus on time-restricted deals and urgency, making people more susceptible to scams.

Because of this, merchants must adopt proactive measures, such as scouting for impersonation sites and filing for a takedown request, to protect their business and reassure their customers. Customers can also flag suspected malicious communications by reporting them to the UK’s National Cyber Security Centre (NCSC) and actively protect themselves and others by doing so.

Guard Against Card-Not-Present (CNP) Fraud

Phishing attempts are just one tactic used by fraudsters during Christmas; there is also the threat posed by card-not-present fraud, which remains a significant issue. This type of fraud involves unauthorised transitions made online using stolen card details, posing risks to both shoppers and merchants.

The reason for this is that the lack of a physical card makes it easier for fraudsters to exploit the sensitive information found on it, which can be obtained through data breaches or even phishing scams.

The challenge posed by these fraudulent activities is even further exacerbated by techniques such as synthetic identity fraud, where criminals merge false and real information to make fraudulent purchases.

To defend against these growing risks, merchants should use advanced fraud prevention software, which increasingly incorporates AI and machine learning for advanced fraud detection, to help detect unusual patterns and decline or flag suspicious activity. Such measures could prove crucial to reducing chargebacks, preventing revenue loss, and maintaining customer trust.

Pay by Bank offers a powerful alternative to other online payment methods by incorporating secure authentication protocols to facilitate account-to-account (A2A) payments. By eliminating the need for card details and leveraging strong customer authentication, this payment method minimises opportunities for fraud, making it harder for cybercriminals to exploit both customers and merchants during peak shopping periods.

Avoid Payment Delays and System Failures

High transaction volumes during the Christmas surge can put a strain on traditional payment systems, often causing delays and even system outages. These disruptions lead to frustration for consumers and lost sales for merchants. Research highlights that 15% of online shoppers abandon their carts when payments are slow or fail, underscoring the importance of secure systems that can handle high traffic.

To reduce these issues, merchants should consider payment solutions with real-time processing capabilities that can handle large transaction volumes during peak periods. Real-time systems ensure that payments go through quickly, keeping customers engaged and avoiding abandoned carts. With faster, more reliable payment processing, merchants can maintain a seamless experience that supports sales and builds consumer trust.

Instant bank payments provide a compelling solution to Christmas’ payment challenges. Customers no longer need to input sensitive card information, instead authorising payment directly from their bank either through a biometric check or pin.

Enhance Security and Drive Customer Loyalty

Card-based payment methods can be more vulnerable to fraud and identity theft during high-transaction periods like Christmas. These issues not only threaten the security of customer data but also harm customer trust, loyalty and business efficiency. To retain a loyal customer base, merchants need secure and resilient payment solutions that align with the fast-paced, large-volume demands of high-yield days like the winter rush for gifts.

For consumers, payment options featuring advanced encryption and multi-factor authentication deliver peace of mind while enhancing the checkout experience. These technologies protect personal data, ensure transaction security and streamline the purchasing process.

Whether it’s a typical day or the shopping surge during the festive season, fraud is an ever-present factor for merchants as well as solution providers to contend with. Whilst knowledge will always be the best safeguard against scams, emerging technologies such as Pay by Bank can act as the first and last line of defence against fraudulent activities.