As the holiday season approaches, e-commerce businesses around the world are gearing up for a surge in online orders (11.11/12.12/Black Friday Cyber Monday). This increase in activity, however, also brings with it an increased risk of payments fraud. In 2022, the estimated global cost of payments fraud reached a staggering $32.4 billion, and APAC accounted for a significant portion of this loss.
Payments Fraud in APAC: A Growing Threat
E-commerce fraud in APAC is on the rise. The region's rapid growth in e-commerce adoption, coupled with a growing preference for digital payments, has created a fertile ground for fraudsters to operate. Additionally, COVID-19 accelerated the shift to online shopping, further amplifying the opportunities for fraudulent activities.
Types of Payments Fraud in APAC
There are various types of payments fraud e-commerce businesses in APAC need to be aware of. Some of the most common types include:
- Account Takeover (ATO) Fraud: This occurs when a fraudster gains unauthorized access to a customer's account and makes fraudulent purchases.
- Card-Not-Present (CNP) Fraud: This type of fraud involves unauthorized transactions using stolen or compromised credit card information.
- Friendly Fraud: This occurs when a customer disputes a legitimate transaction, claiming that it was unauthorized or fraudulent.
Reducing Chargebacks during the Holiday Season
The holiday season is a prime target for fraudsters, as they take advantage of the increased volume of online transactions and the tendency for consumers to be less vigilant during this time.
Chargebacks, which occur when a customer disputes a transaction and the credit card issuer forces the merchant to refund the amount, can significantly impact e-commerce businesses' profitability.
To reduce chargebacks during the holiday season, e-commerce companies in APAC can implement a range of strategies, including:
- Implementing Multi-factor authentication (MFA): Requiring a code sent to the customer's phone in addition to their password, can significantly reduce the risk of ATO fraud.
- Utilizing Fraud Prevention Tools: Employing fraud prevention tools that analyze transaction data and identify potential fraudulent activities can help prevent CNP fraud.
- Educating Customers: Raising customer awareness about fraud prevention measures, such as creating strong passwords and keeping their credit card information secure, can help reduce friendly fraud.
- Equipping Teams with Advanced Fraud Detection Capabilities: Partnering with solution providers like Corgi that utilise machine learning and other advanced techniques to detect and prevent fraud can provide an extra layer of protection.
Additional Tips for E-commerce Businesses in APAC
Online businesses in APAC can further protect themselves from fraud by:
- Monitoring Transactions Regularly: Regularly reviewing transaction data for anomalies and suspicious patterns can help identify potential fraudulent activities early on.
- Establishing Clear Refund Policies: Clearly defining refund policies and procedures can help reduce disputes and minimize friendly fraud cases.
- Collaborating with Payment Providers: Working closely with payment providers to stay updated on emerging fraud trends and implement new security measures can help stay ahead of the curve.
By implementing these strategies and staying vigilant, e-commerce businesses in APAC can effectively combat payments fraud, protect their profits, and ensure a secure and enjoyable shopping experience for their customers during the upcoming holiday season and beyond.
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[Cover Photo by KE ATLAS]