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Digital Identity, Security & Online Fraud

US: Online retailers to lose USD 63 mln between Thanksgiving and Cyber Monday

Friday 29 November 2013 | 09:08 AM CET

US e-commerce merchants are expected to lose at least USD 63 million between Thanksgiving and Cyber Monday due to online fraud, recent findings indicate.

According to a report by Trustev, an anti-fraud technology provider, up to 9% of all online transactions carried out during the period under review will turn out to be fraudulent. At busy periods like the holiday season, retailers will miss much of the fraudulent activity, which will only become apparent after year-end when customers start receiving their credit card statements. With up to 90 days to report any suspicious card activity, the effects of holiday fraud can have a massive impact on a retailer’s balance sheet for several months.

The holiday shopping season is the busiest time of the year for fraudsters. Card scams, return scams and fake identities contribute to hundreds of millions in losses for retailers. The sheer volume of transactions occurring online during the holiday period means that while awareness is heightened, many retailers, banks, and credit card companies are forced to relax their security and fraud protection in order to cope with the onslaught of card payments.

Validating a credit card’s authenticity is not a high enough barrier for many fraudsters. Trustev focuses on identifying the individual attempting to make a purchase before any card details are even submitted. Trustev’s solution verifies the shopper’s identity prior to the payment process. Its technology works in the background of the transaction, verifying multiple dynamic data sources to confirm the customer’s identity.

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