Report: Growing Channels, Markets, Payment Options Leading to ‘Fragmentation of Fraud’
Dec. 4, 2014
The proliferation of channels through which merchants are now able to sell their products and services has provided the opportunity for additional revenue, but it has also made fraud prevention more complex and difficult, according to a new report from Worldpay. Nearly three quarters of those surveyed plan to operate new sales channels within the next three years, but an even higher percentage (76 percent) believe doing so will make fraud prevention more difficult.
The channel merchants feel is most prone to fraud is online through a third-party Website. Sixty-nine percent of survey respondents felt this was the riskiest channel. M-commerce was perceived to be the next riskiest (64 percent) followed by a merchant’s own Website (55 percent), sales agency or broker sales (39 percent), telephone or call center sales (36 percent), catalogues or mail order (34 percent). Only 25 percent of merchants identified physical stores as the most prone to fraud.
In addition to channels, the increasing number of markets into which merchants are selling and the growing array of payment methods also are increasing complexity for merchants and therefore making fraud prevention more difficult. While 57 percent of merchants said they need a dedicated omnichannel fraud and loss-prevention team, many said they lack the time, budget and/or knowledge to do so.