With RBTE just around the corner, released data from Radial’s e-commerce fraud technology lab adds another alarming statistic for retailers to contend with when delivering a seamless customer experience.
To date in 2017, data shows a 200% increase in credit card testing, a tactic used by fraudsters to test stolen credit card numbers with small incremental purchases before making large-dollar purchases on the card, compared to the same quarter in 2016. Fraud also is up 30% year over year, proving to already struggling retailers that this is just the beginning of online fraud in the post-EMV world.
Managing fraud continues to be a double-edged sword for retailers. Many either apply tools that over-reject orders, but in the process decrease their customer transaction approvals and lose valuable revenue in return.
Or, retailers build their fraud teams in-house, which often lack the historical data and rules to catch subtle card testing tactics like the ones identified by Radial. Card testing leads to more eCommerce fraud as it’s easily identifiable when a retailer is allowing these types of fraudulent transactions through.
“Our data adds another alarming statistic for retailers who may be unprepared to manage fraud activity in e-ommerce. We know fraudsters won’t stop looking for opportunities to monetize their stolen data and will even automate this process once they have a card that appears to be working,” said Stefan Weitz, chief product and strategy officer at Radial.
“This results in quick, large volume purchases that leave retailers vulnerable. When retailers miss card testing, they’re contributing to future card attacks. Fighting card testing is complicated, but can stop millions of unanticipated fraud attacks if tracked and managed efficiently.”
The fraud landscape is rapidly changing and presents pervasive and growing threats for eCommerce merchants. Radial’s Fraud Technology Lab and a team of data scientists use their robust fraud platform to uncover how trends in fraud can drive down retailers’ bottom lines and increase their risk.
According to Radial’s analyses, since August 2016, the market segments of electronics, entertainment, jewelry, and sporting goods experienced the highest increases in online fraud during the 2016 peak season.
“Increasing revenue has never been more important for retailers. They cannot afford to be slammed with fees that stem from missing fraud activity and must count on each good order getting approved,” said Weitz.
“More retailers claim they are combating fraud, but underestimate the other areas they’re endangering – like revenue and customer loyalty – when they don’t use the types of data sets Radial has to increase transaction approval and take on full liability of combating fraud.”
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