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The fight against fraud: what you need to know to protect your business and your customers

30 Jul 2020 04:00

During the COVID-19 health crisis, safety – whether it’s washing our hands, keeping our distance, or tapping our contactless cards to minimise the risk of transmission – has become almost a reflex, and something we will likely have to think about for years to come. As the world adjusts to its new normal, it will be interesting to see which new habits and measures will be temporary, and which are with us for the long haul.

In recent weeks, we have seen much of the high street reopen its doors to the public, from clothes shops and salons to pubs and restaurants. For business owners, the priority post-lockdown must be to protect their staff, customers, and organisations as a whole.

As SMEs and household brands get creative in pivoting their offerings to make things safer for staff and customers, it is worth noting the other areas where businesses could be vulnerable during this period of transformation. The failure to safeguard against the risk of fraud, for example, could result in both businesses and their customers finding themselves out of pocket. So what can be done to minimise the risk, and how can we embrace the future with confidence?

We explore just a few of the challenges faced by businesses today, and the steps that can be taken to avoid them.

With online sales accounting for 32.8 per cent of retail transactions in May 2020 (up 18.9 per cent since February), it’s plain to see that many businesses have benefitted from the decision to transition online. That said, we know the digital world is not without its pitfalls. Where the general public is concerned, Action Fraud has recorded at least 824 people having been targeted by virus-related scams across the UK – and counting. As a result, £2m has been lost to fraudsters since March.

Fraud prevention? Kount us in

There are many preventative measures to combat the threat of cybercrime – from screening tools to help prevent data breaches, to the new PSD2 or Strong Customer Authentication (SCA) rules that are being rolled out. With UK Finance predicting that the number of UK payments will grow by 43.3 billion over the next decade, protecting online transactions should continue to be high on the list of priorities for merchants. A key innovation in the payments space, SCA requires customers to checkout online with an another form of identification, layered on top of their card details (and/or simple password) alone. This includes a passcode sent to their mobile phone at the time of purchase, a PIN code, or even biometric data like a fingerprint; these all form part of the two-factor authentication process – all enabled through leading payment security solution 3D Secure (3DS). A study by the University of Oxford with Mastercard revealed almost a third of all online purchases are abandoned due to forgotten passwords – with SCA also helping to combat this.

In the run-up to the EU’s SCA regulation, Barclaycard has partnered with Kount: an AI-driven fraud prevention platform, perfect for helping merchants protect and progress their online payment processes. Its adaptive machine learning features – along with the Identity Trust Global Network – help businesses avoid eCommerce fraud, giving consumers a smoother, safer experience overall. Open to customers of Barclays Transact – a suite of tools designed to make transactions smoother and safer for merchants – Kount powers a new fraud module through complex data linking and Artificial Intelligence (AI) algorithms to identify fraudulent activity in real-time (and at the point of purchase), as well as safeguarding the business against false positives and chargebacks. To do this, all transactions analysed in real time are scored as high or low risk, with high-risk activity prompting more stringent authentication.

In a bid to help tackle growing cases of fraud, David Jeffrey, Director of Product at Barclaycard Payments, says: “We are really excited to be partnering with Kount, because they share our goal of collaborative innovation, and a drive to deliver best-in-class shopper experiences.”

Payments: welcome to the better normal

From our viewpoint at the centre of the UK economy, our priority is the health and safety of businesses re-entering the workplace, while also ensuring the utmost protection for the communities that surround them. David Jeffrey adds: “Put simply, whatever the size of your business, having the right tools and processes in place is vital to protect against fraudulent activity. As fraudsters become more sophisticated in their methods, so too must the companies that trade online.”

With the new cap set at £45 for shoppers using their contactless card – encouraging customers to avoid the use of loose change – or the integration of Kount to promote the use of SCA for a safe and frictionless payment journey online, we’re looking forward to contributing to a better, more efficient culture of payment acceptance as we work together to find our way back.