Over the past several years, we have witnessed an expansion in ecommerce. This progress has caused many technological innovations to become market reality, serving the customers’ needs and enabling businesses to develop further. But, in parallel with the many technological strides and the relentless pursuit of technological advancements, payment fraud has developed, too. Social engineering fraud has been on the rise. Assisted by AI, phishing emails are getting perfect. Native speakers in call centers and voice deep faking tools make scamming calls scalable. It encompasses anything and everything, from friendly fraud to account takeover, and others.
Fraudsters systematically attack the weakest link in the chain – the human being. The problem has grown so big that regulators have started rethinking liability and gross negligence.
Businesses face huge losses while integrating business models that try to protect their customers’ privacy and data. At the same time, the cardholder’s needs logically remains about simplicity and non-negotiable security. A new study from Juniper Research has found that the cumulative merchant losses to online payment fraud globally between 2023 and 2027 will exceed USD 343 billion. It’s a joint call for all of us to prevent this.
We cannot always predict the trends of fraudsters, but we must remain prepared for the challenges with a diversity of the right tools and measures and rely on the expertise and knowledge of those proven in this field.
With constant fraud increase, strong prevention is always better and cheaper than finding a cure later.
Investments into risk models, data and AI/ML-driven models will be crucial for fortifying the industry against evolving threats and propelling it into a new era of secure and efficient transactions. Digitalisation will heighten the emphasis on security measures like tokenization, biometric authentication, and other disruptive technologies, providing flexible online checkout options for merchants and consumers.
Currently, tokenization, 3DS, and SRC with Click-to-Pay remain vital tools in the fight against payment fraud. Novel authentication and identity solutions using biometrical and behavioural aspects make account takeovers much harder.
In 2024, data sharing takes the highlighted stage, with PSD3 bringing security, accessibility, and inclusion to the forefront. This raises the need to integrate advanced technologies like AI and ML to support creating a more personalised and secure environment. Netcetera has always been among the frontrunners in the industry. Our experts think outside the box and prepare in advance for their challenges. Additionally, cooperation and exchange on current fraud cases among our clients play a decisive role when fraudsters act in networks against the payment ecosystem.
Netcetera’s priority remains to prevent fraud while balancing security and delivering an excellent user experience.
Throughout the years, Netcetera has specialised and is recognised in its 3-D Secure expertise with its 3DS end-to-end offering, which covers all the areas of the payment ecosystem, from issuers, acquirers, and merchants through all major card networks. Modularity and flexibility are at the heart of all our products.
However, constant evolution is a must to remain among the best. If we guarantee security and fraud protection with a user experience that meets the needs of modern consumers, then we must deliver this.
Netcetera’s products continuously evolve to meet consumer preferences and technological innovations. We aim to provide flexible, secure, and user-friendly payment solutions aligned with evolving market needs. Such is the case with Click to Pay and the eCOM Tokenizer. Our intelligent 3-D Secure guarantees improved approval rates by up to 13%.
According to the Global Payments Report 2023 data, payments-focused fintechs now number more than 5,000 globally and account for about USD 100 billion of total industry revenues. By 2030, they could command a revenue pool worth USD 520 billion, intensifying competitive pressure on incumbents. Tech modernisation is intensifying, and GenAI is exploding onto the payment scene. Both could transform payments.
Europe’s third Payment Services Directive (PSD3) includes stricter requirements to combat fraud beyond PSD2’s existing Strong Customer Authentication (SCA) protocols. Meanwhile, the EMVCo has introduced a third generation of its 3-D Secure (3DS 2.3.1) protocols to protect card transactions.
There are many initiatives and actions, but it is more than clear that the customers are the business drivers and the centre of the digital world. Considering their need to enjoy a fast, easy, and secure digital payment experience, there is an evident shift towards using in-app and digital wallets.
We expect new technologies to continue revolutionising the online payment landscape, whether a sensible regulation or AI and machine learning advancements for fraud detection and prevention, more secure biometric authentication methods, and the widespread adoption of contactless and mobile payment options. Implementing fraud prevention strategies by integrating a multilayered approach with the right mix of several tools will be key. Overall, it is a constant update and adaptability.
Companies need to re-examine themselves and their fitness or else they risk to remove themselves from the customer’s cart list.
Listen to the customers, adapt your work, and train your staff. It is a tough market, especially for the smaller merchants. Use the wave of innovative technologies to make payments as frictionless as possible to keep the business competitive.
An example is Secure Payment Confirmation, which introduces biometrics to a new group of digital shoppers. Merchants must enable all use cases combining brick-and-mortar shops with the digital point of sales. Next to it, seeing strong growth in social media ecommerce solutions such as TikTok means that adding social media as a channel becomes more relevant for Generation Z and Alpha consumers.
Netcetera is a pioneering Swiss software company with forward-thinking digital solutions across the banking, payment, mobility, healthcare, and publishing industries. Netcetera creates growth opportunities for the businesses it works with by pushing the boundaries of digital possibilities. Netcetera is an expert at delivering seamless and secure user journeys within highly secure and privacy-driven environments. With its expertise and over 25-year track record, the company develops future-proof and scalable software that creates value for its clients and consumers.
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