Most, 60pc of retailers in Europe saw an increase in fraud in the past year. With online fraud on the increase, more than two thirds (69pc) of consumers say they would avoid merchants that fall victim to a data breach. That’s according to research, as part of the payments platform Adyen’s European 2018 Retail Report. It suggests that retailers are upping their efforts to prevent fraudulent transactions. More than 75pc of the retailers surveyed said they are prepared for fraud or have active fraud prevention systems in place.
The study found that many consumers are willing to change their shopping behaviour if it would help protect their financial details. Over half (55pc) said they’d pay with cards more frequently if it helped to reduce the risk of fraud, while more than two in five (44pc) said they’d pay through an app if it did the same. The study also found that retailers are turning to biometrics to help authenticate payments securely. More than half (57pc) of retailers are looking to implement fingerprint biometrics, and 56pc are looking to use voice authentication to bolster their cybercrime defences. Some 31pc of retailers understand the role that machine learning can play in fighting fraud.
Retailers also need to be aware of the legislative requirements to keep their customers safe and authenticate transactions. The European Union’s Payment Service Directive 2 (PSD2) stipulates that transactions need to pass new authentication standards, and implement 3D Secure 2.0 by 2019. More than 20 per cent of retailers already comply with this standard, 27pc are planning to adopt technology to comply in the next 12 months. Almost a quarter 24 percent said they don’t have plans to adopt.
Myles Dawson, UK Managing Director of Adyen said: “As technology makes the shopping experience more engaging and convenient, it also powers the sophisticated fraudsters. Retailers need to walk a very fine line of doing everything in their power to help prevent fraudulent transactions and protect their customers, but they also don’t want to be overly cautious and decline legitimate transactions. Payments technology is key in this regard. Machine learning and advanced data analysis plays a vital role in accurately identifying the shopper behind each transaction to reduce chargebacks and false positives.”