Preventing payment fraud in a post-Covid world

In the payment world, the change wrought by the pandemic has been stark. More of us are using technology to make payments in alternative ways. This has happened even amongst demographics that aren’t thought to be technically adept, with ECOMMPAY data showing that one in five (21%) 45 to 54-year-olds have increased their digital wallet usage during the pandemic, while more than half (51%) of over 55s say they have used a digital wallet.

by Paul Marcantonio, Executive Director UK & Western Europe, ECOMMPAY

This new normal is the result of major digital transformation – we’re all used to working remotely, shopping online, and using apps to prove our health stats, and mostly enjoy the flexibility and convenience these changes bring.

However, the change has had the side effect of creating prime opportunities for scammers and fraudsters, with these digital environments exposing us all to fraudulent activity at an increased rate. To give you a sense of scale, the UK National Cyber Security Centre revealed that it had taken down more scams in the past year, than it had the previous three years combined.

The impacts of a scam on a business can be significant, causing great reputational and economic damage. So, how can you protect your business from future payment fraud?

Ensure your staff have the right training

Cybersecurity software has come a long way. Modern programs, if used correctly, now offer protections against most digital attacks. However, fraudsters have realised this and now target people through their machines, using ‘social engineering’ techniques to get them to share confidential information. More than 95% of security breaches can be attributed to  human error, so it’s imperative that your staff have training to minimise fraud risk.

Training should include using relevant examples to teach staff about how scams take place and discussing how to identify fraud. It is also imperative that businesses ensure their staff are well versed on the internal processes in place to deal with fraud. For example, if your business chooses to ask for ID before accepting payment, then you should make sure that your staff are trained to follow that process.

Use the latest data-driven technologies

We are all prone to human error so modern technology goes a long way in helping prevent payment fraud. Machine learning software monitors transactions in real time, using innovative algorithms to help companies spot fraud earlier by scanning for signs of impropriety – such as inconsistencies in payment data. This is backed up by research – security software which applies artificial intelligence scoring to inbound transactions boast an average fraud detection rate of 97%.

In addition, it is worth adding a multi-factor authentication (MFA) process. Studies have shown that using MFA can reduce the chances of an account being compromised by an automated attack by 99.9%. By using MFA, you drastically slash the odds that another individual can gain access to your finances.

Finally, encrypting your transactions and emails will stop individuals manipulating or editing documents. There will be no chance of a recipient altering the information for fraudulent use.

Partner with a trusted payment provider

Partnering with the right payment provider will add an extra layer to your fraud prevention strategy and help to grow your business. Trust and safety factors are key, and will lead to increased sales, as customers are more likely to go through with a transaction if they recognise the payment processor as a trustworthy one. The right data-driven payment solution for you should strike a balance between conversion and security, helping your business to grow without subjecting your customers to undue risk.

Be sure to check if your payment partner has industry-recognised safety and security credentials, and reviews or testimonials. Likewise, check their fraud prevention approach. Do they use the technology listed earlier? Do they include human moderation? This could signal whether anti-fraud is a priority or not.

Payment fraud is a scourge for many businesses, and changes in the way consumers work and spend in the post-Covid world could make it worse. However, there are many things that you can do to prevent your business from becoming a victim. By ensuring that your staff are properly trained, using a reputable payment partner and keeping up to date with technology, you’ll keep your business one step ahead of fraudsters.