Everyday there’s a new story about fraud across industries. Whether it’s a ransomware attack, hacking private data, an information leak or something as simple as using stolen credit card information, more bad actors are on the streets now than ever before. That has become more evident over the years in the payments space, as a report from Juniper Research stated that “the total cost of eCommerce fraud to merchants will exceed $48 billion globally in 2023, from just over $41 billion in 2022. It predicted that this growth will be accelerated by the increasing use of alternative payment methods, such as digital wallets and BNPL (Buy-Now-Pay-Later), which are creating new fraud risks.”
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Merchants of all sizes can be susceptible to fraud, and it’s important for business owners and managers on the front-line to,
1) understand how fraud can take place, and
2) ensure that security features are in place to help prevent it.
Those seemingly short and simple steps are essential for merchants to protect their customers and for the business itself to not lose money to fraud. However, it’s not always that simple.
Many fraudsters’ methods are highly technical, and the technology required to enable seamless payment experiences continues to change as well. It’s no surprise, then, that technology is playing a big role in assisting businesses with staying up to date on the latest threats and curbing them before they happen. It starts with communication, education and prevention.
The Power of the Smart Payment Terminal
Often times, merchants are left to fend for themselves when it comes to fraud prevention. That’s easy to do when you’re a huge corporation and have a team dedicated to finding and stopping threats, but it’s nearly impossible for small and medium-sized businesses (SMBs) with limited staff, resources and sometimes tech knowledge to handle that all themselves. That’s where the power of the smart payment terminal can be better utilized.
Payment devices are very underutilized across merchant industries.
But by unlocking their full potential, these tools can be turned into a “direct-to-merchant” communication channel, enabling processors to reach merchants and their associates more quickly and effectively than ever. This allows the service provider’s larger security teams to help keep smaller businesses informed about recent fraud trends and other payment-related fraud and security topics.
Educating both business owners and their employees who are on the front-line and at the point of purchase is a vital 1st step in them noticing potential fraudulent payments before they occur. At the same time, it’s important for processors to work with their merchants to confirm that the most effective security features are in place. Again, processors can simply use the communication tool on the smart terminal to connect directly with merchants to inform them about the latest fraud and security related products and services, increasing the processor’s revenue per merchant while decreasing merchants’ exposure.
Things are a bit trickier for merchants that allow for buy online, pickup in-store shopping. This area of retail is open to even more fraud.
Again, having technology in place that easily assists store associates with confirming online purchases can improve security. For example, when a customer makes a purchase online for in-store pickup, there should be a system in place that quickly verifies the online transaction information with the pickup process – something as simple as requiring the purchaser to enter their phone number, the order number or a passcode – to ensure bad actors who are watching for any opportunity aren’t simply claiming and then stealing their already paid for items.
Why It Matters
Bad actors are constantly looking for a quick payday, and they’re not going anywhere anytime soon. In fact, these criminals are becoming savvier and finding new, innovative ways to trick people and systems. For businesses that are already operating on tight margins, ensuring they are informed on the latest fraud schemes can help them ensure they have security measures in place that could ultimately save them from going under.
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