Tech Bytes

Enhancing Fraud Prevention with Risk-Based Authentication and Method URL

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Preventing fraud while maintaining a seamless user experience is crucial for merchants and issuers alike in the rapidly evolving digital payment landscape. A key way to strengthen fraud prevention is by gathering more device and browser characteristics before authentication. This can be achieved through Risk-Based Authentication (RBA), Browser Fingerprinting, and the use of Method URL as part of the EMV 3DS protocol. Let’s explore how these elements work together to improve security and reduce fraud. The Role of Risk-Based Authentication (RBA) Risk-Based Authentication (RBA) dynamically assesses each transaction’s risk level based on multiple factors, such as device characteristics, location, and user behaviour. Instead of applying a blanket security protocol for all transactions, RBA allows issuers to adjust the level of authentication required based on the perceived risk. This improves fraud detection while minimizing friction for low-risk transactions, thereby creating a better user experience. Browser Fingerprinting: A Core Element of Fraud Detection Browser fingerprinting is a technique used to collect unique information from a user’s browser. This includes data like the device’s operating system, browser version, plugins, IP address, screen resolution, and more. By building a unique profile of the user’s environment, issuers can detect anomalies that may indicate fraud, such as sudden changes in the user’s device or location. However, to leverage this information effectively, additional data must be captured early in the transaction flow, which is where Method URL comes into play. Understanding Method URL Method URL is a critical step of the EMV 3DS protocol. It enables issuers to collect additional browser information during the early stages of the authentication process. This step, which occurs before the authentication request is fully processed, provides vital data that can enhance RBA and fraud prevention measures. How Method URL Works: Benefits of Method URL in Fraud Prevention The use of Method URL offers several benefits for both issuers and merchants in combating fraud: Best Practices for Implementing Method URL To maximize the benefits of Method URL, issuers and merchants should follow these best practices: Integrating Wibmo Protect Wibmo Protect is an advanced fraud prevention solution that seamlessly integrates with RBA, Browser Fingerprinting, and Method URL to provide an additional layer of security. By leveraging Wibmo Protect, issuers and merchants can benefit from: Conclusion Method URL, when integrated properly, significantly improves fraud prevention by enabling issuers to gather vital browser and device characteristics early in the authentication process. By leveraging this data for risk-based authentication, both issuers and merchants can reduce fraud, improve authentication success rates, and provide a better user experience for customers. As fraud prevention becomes more complex, using tools like Method URL and Wibmo Protect is essential for staying ahead of emerging threats and ensuring secure, frictionless transactions.

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The Role of AI and ML in Averting Fraud in Real Time 

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Fraudsters are becoming increasingly sophisticated, leveraging advanced technologies to exploit vulnerabilities. As a leading provider of secure payment solutions, Wibmo understands the critical role that artificial intelligence (AI) and machine learning (ML) play in averting fraud in real-time. This blog explores how AI and ML are transforming fraud prevention, the benefits of these technologies, and how Wibmo’s innovative products are at the forefront of this battle.  The Growing Threat of Fraud  Fraud is a pervasive issue that affects individuals and organizations worldwide. According to a report by Juniper Research, global losses from online payment fraud are expected to exceed $206 billion between 2021 and 2025. This staggering figure underscores the urgent need for effective fraud prevention measures.  How AI and ML Combat Fraud  AI and ML are revolutionizing the way we detect and prevent fraud. These technologies enable systems to analyse vast amounts of data, identify patterns, and make real-time decisions. Here are some keyways AI and ML are used in fraud prevention:  The Benefits of AI and ML in Fraud Prevention  The integration of AI and ML in fraud prevention offers numerous benefits:  Wibmo’s AI and ML Solutions  At Wibmo, we leverage AI and ML to provide cutting-edge fraud prevention solutions. Our products are designed to protect users and organizations from a wide range of fraudulent activities. Here are some of our key offerings:  Real-World Impact of AI and ML in Fraud Prevention  The impact of AI and ML in fraud prevention is evident in various industries. For instance, banks using AI-powered fraud detection systems have reported a 50% reduction in false positives and a 30% increase in fraud detection rates. Similarly, e-commerce platforms have seen a significant decrease in chargebacks and fraudulent transactions by implementing AI and ML solutions.  The Future of AI and ML in Fraud Prevention  As AI and ML technologies continue to advance, their role in fraud prevention will become even more critical. Here are some trends to watch for:  In the fight against fraud, AI and ML are powerful allies. These technologies enable real-time detection and prevention, ensuring that individuals and organizations can stay one step ahead of fraudsters. At Wibmo, we are committed to leveraging AI and ML to provide innovative fraud prevention solutions that protect our users and enhance their security. By staying informed about the latest trends and continuously improving our systems, we can create a safer digital environment for everyone.  By understanding the role of AI and ML in fraud prevention and adopting advanced solutions like those offered by Wibmo, you can significantly reduce the risk of falling victim to fraud. Stay vigilant, stay informed, and stay secure. 

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Wibmo to Showcase Advanced Payment Solutions at Global Fintech Fest 2024

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We’re thrilled to announce that Wibmo, a PayU company, a leader in payment security, fraud and risk management, tokenization, payment gateway, prepaid card platform, and digital financial services, will be participating in the Global Fintech Fest 2024 (GFF). The event is scheduled to take place from August 28th to 30th at the Jio World Convention Centre in Mumbai. You’ll find us prominently featured at the PayU booth J1. Why You Should Visit Us at GFF 2024 As the fintech industry rapidly evolves, we at Wibmo are at the forefront of delivering secure, seamless, and innovative payment solutions that cater to the needs of banks, fintechs, and financial institutions. GFF 2024 presents a unique platform for us to showcase our comprehensive suite of offerings, which are designed to enhance security, ensure compliance, and elevate the user experience in digital payments. Explore Our Product Showcases and Launches We are excited to unveil our latest products and innovations, in collaboration with PayU and our strategic partners. These solutions address the unique challenges posed by today’s fintech environment and have the potential to revolutionize how you approach payment security, fraud management, and digital financial services. Engage with Our Leadership and Industry Experts One of the highlights of our participation at GFF 2024 is the opportunity for you to engage directly with our leadership team, including our CEO, Suresh Rajagopalan. Our leader from Wibmo & PayU, will be available to share insights into the latest trends and developments shaping the future of fintech and digital payments. These interactions will provide valuable perspectives on how your business can navigate the complexities of the digital payments landscape. Discover Strategic Partnership Opportunities At Wibmo, we believe in driving the future of digital payments through continuous innovation and strategic collaborations. During GFF 2024, you’ll have the chance to explore potential partnerships with us, leveraging our expertise to create robust, secure, and compliant payment solutions tailored to your specific needs. Shaping the Future of Digital Payments Our presence at GFF 2024 is more than just a showcase of technology; it reflects our commitment to shaping the future of secure digital payments. As businesses across the globe seek to enhance their digital payment infrastructures, we stand out as a leader in providing the innovative, secure, and scalable solutions needed to thrive in the digital age. If you’re attending GFF 2024 and want to stay ahead of the curve in the ever-evolving fintech landscape, a visit to our booth at J1 is essential. The insights, innovations, and opportunities that await you are sure to be a highlight of this year’s Global Fintech Fest. Don’t Miss Out We look forward to meeting you at GFF 2024. For more information or to schedule a meeting with our team, please click here. Let’s shape the future of digital payments together!

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The Comprehensive Guide to Secure Digital Transactions with 3D Secure

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Have you ever wondered how your online card transactions, whether domestic or international, result in a seamless shopping experience without concerns about merchant credentials, card data security, or delivery issues? The answer lies in EMV 3DS (3D Secure). This protocol is noticeable on the payment checkout pages of online merchants and at Point of Sale (PoS) terminals. What is 3D Secure (3DS)? 3D Secure (3DS) is a payments protocol that facilitates card transactions (credit, debit, prepaid, gift) at PoS or online globally. It ensures that any cardholder from any bank can seamlessly transact with any merchant acquirer worldwide. The three domains involved in a 3D Secure transaction are: 1. Acquirer Domain (Merchant’s Bank) 2. Issuer Domain (Cardholder’s Bank) 3. Card Network Domain How 3D Secure Works? During the checkout process, when you enter your card details online or swipe your card at a PoS terminal, the merchant/acquirer domain resolves the issuing bank. This process links to the cardholder’s account details, prompting the user to enter a one-time passcode (OTP) sent to their registered mobile device or email. This authentication step verifies the transaction’s legitimacy, adding a layer of protection against unauthorized use. The latest version, 3D Secure 2.0, incorporates advanced risk-based authentication and supports multi-factor authentication, including biometrics, enhancing both security and user experience. Why to invest in 3D Secure? While some businesses may view the implementation of 3D Secure as an additional cost, it is a strategic investment with substantial long-term benefits. Implementing 3D Secure can reduce chargeback fees, fraud-related losses, and dispute resolution expenses. Additionally, providing a secure online shopping experience builds customer confidence, leading to increased sales, loyalty, and trust. The Role of 3D Secure in Fraud Prevention Fraud is a significant concern for businesses, prompting the adoption of advanced authentication protocols like 3D Secure. Originally developed by Visa as “Verified by Visa” and later adopted by Mastercard as “Mastercard SecureCode,” 3D Secure adds an extra security layer to online transactions. By incorporating additional authentication steps, 3D Secure reduces the risk of unauthorized transactions, lowers chargeback rates, and enhances customer trust. Wibmo’s Innovative Solutions for Secure Transactions Wibmo addresses secure digital transaction challenges with its EMVCo-approved EMV® 3DS Server and SDK. Designed for Android and iOS platforms, these solutions enhance transaction security and reduce chargeback risks. The EMV® 3DS Server integrates the latest security protocols, while the SDK supports seamless transaction flows and comprehensive device data collection. According to recent surveys, fraud rates have increased by 15% in the past year, with identity theft, fraudulent payment schemes, and unauthorized transactions being common risks. These illicit activities can cause significant financial losses, damage reputations, and disrupt corporate operations. Advanced authentication protocols like 3D Secure, combined with a thorough understanding of fraud’s true impact, enable businesses to strengthen their defenses and protect against evolving digital threats. Understanding the True Cost of Fraud Fraud’s financial impact goes beyond immediate monetary losses. It includes stolen funds, chargeback fees, legal consequences, and reputational damage, which can tarnish a company’s image, lead to customer loss, and generate negative reviews. Addressing fraud effectively requires recognizing these multifaceted repercussions and implementing robust security measures. By understanding and leveraging 3D Secure, businesses can ensure a secure, seamless, and customer-friendly payment experience, fostering trust and driving growth in the digital economy. Key Features of Wibmo’s 3-D Secure solution (SDK, Server) – EMVCo Certification for Security Assurance – Seamless Transaction Flow Support – Versatile UI Support (Native and HTML) – Cutting-Edge Security Protocols – Flexible Hosting Solutions (Cloud or On-Premises) – And More! Benefits of 3DS Server Implementation – Elevated Security Standards through MFA (Multi factor Authentication) support – Effortless Regulatory Compliance – Frictionless Transaction Experience – Comprehensive Device Data Security – Simplified Integration – And More! Investing in 3D Secure is not just a prudent decision; it’s a strategic imperative for businesses aiming to thrive in the digital era. By prioritizing transaction security and customer trust, businesses can lay the foundation for sustained success in the digital realm. Secure your transactions, invest in 3D Secure, and embark on a journey toward a future where digital payments are synonymous with safety, reliability, and seamless experiences. Keep an eye on how Wibmo’s robust 3D Secure can help you achieve everything to fight fraud. To know more about Wibmo’s 3-D Secure solution, you can write to sales@wibmo.com. Author: Ravi Battula, Head of Payment Security & Merchant Acquisition Business Wibmo A PayU/Naspers FinTech Company 3D Secure, Digital Payment, Fraud Prevention, Secure Payment

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How Banking-as-a-Service (BaaS) is Transforming the Way Banks Operate

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The emergence of digital banking solutions has caused a major upheaval in the financial services sector in recent years. Of these advances, Banking-as-a-Service (BaaS) is one that sticks out as a crucial advancement that is changing the way banks function. Through the utilization of existing banks’ infrastructure and regulatory framework, BaaS allows non-bank businesses to provide financial services. With the help of facts, statistics, and opinions from professionals in the field, this essay investigates how BaaS is transforming banking operations. Understanding Banking-as-a-Service (BaaS) Banking-as-a-Service (BaaS) is a model that allows third-party companies, typically fintech firms, to offer banking services without having to build their own banking infrastructure. Instead, these companies partner with licensed banks that provide the necessary backend services, including regulatory compliance, security, and transaction processing. Key Components of BaaS 1. API Integration: BaaS platforms rely heavily on Application Programming Interfaces (APIs) to enable seamless integration between banks and third-party service providers. 2. Regulatory Compliance: Banks offering BaaS ensure that all transactions and services comply with relevant financial regulations, safeguarding both partners and customers. 3. White-Label Solutions: Many BaaS providers offer white-label banking solutions that fintech companies can brand as their own while leveraging the underlying banking infrastructure. The Impact of BaaS on Traditional Banking Enhanced Customer Experience One of the most significant impacts of BaaS on traditional banking is the enhancement of customer experience. By partnering with fintech companies, banks can offer a broader range of services and a more user-friendly interface. According to a survey by Deloitte, 73% of consumers are likely to use digital banking services offered by non-bank entities if they provide a better experience than traditional banks. Cost Efficiency and Scalability BaaS enables banks to scale their operations more efficiently. By outsourcing certain services to fintech partners, banks can reduce operational costs and focus on core banking activities. A report by Accenture indicates that banks leveraging BaaS can reduce their operational costs by up to 30%. Innovation and Speed to Market The integration of BaaS allows banks to innovate and bring new products to market more quickly. Fintech companies, known for their agility, can develop and deploy new features rapidly, giving banks a competitive edge. This speed to market is crucial in an industry where customer expectations are continually evolving. Access to New Markets BaaS opens up new revenue streams for banks by allowing them to reach previously underserved markets. For instance, digital-only banks and neobanks can offer services in regions where traditional banks have limited presence. This expansion is facilitated by the lower cost and higher flexibility of digital banking models. Data and Statistics Supporting BaaS Growth The growing adoption of BaaS is supported by compelling data and statistics: 1. Market Growth: The global BaaS market size was valued at USD 356 billion in 2020 and is expected to grow at a CAGR of 25% from 2021 to 2028, reaching approximately USD 2.3 trillion by 2028. 2. Consumer Demand: A study by PwC found that 64% of consumers have used one or more fintech platforms, indicating a strong market demand for digital banking services. 3. Banking Partnerships: According to a report by Finextra, 85% of banks worldwide have entered into partnerships with fintech companies to leverage BaaS platforms. Benefits of BaaS for Banks BaaS offers numerous benefits for traditional banks, which can be summarized as follows: – Revenue Diversification: BaaS allows banks to diversify their revenue streams by offering white-label solutions to fintech companies and earning fees from these partnerships. – Enhanced Innovation: By collaborating with fintech firms, banks can leverage cutting-edge technologies and innovative solutions that they might not develop in-house. – Improved Customer Engagement: BaaS enables banks to offer a more personalized and engaging customer experience through digital channels. – Reduced Time to Market: With BaaS, banks can bring new products and services to market faster, responding swiftly to changing consumer demands. – Operational Efficiency: By outsourcing non-core functions, banks can focus on their core competencies and streamline their operations. – Regulatory Compliance: Partnering with fintech companies through BaaS allows banks to ensure that all new services comply with regulatory requirements, reducing the risk of non-compliance. Challenges and Considerations Regulatory Challenges: While BaaS offers numerous benefits, it also presents regulatory challenges. Banks must ensure that their fintech partners comply with stringent regulatory standards. This requires robust oversight and due diligence to avoid potential legal and compliance issues. Data Security and Privacy: Data security and privacy are critical concerns in the BaaS ecosystem. Banks must implement advanced security measures to protect customer data and maintain trust. This includes ensuring that fintech partners adhere to the same high standards of data protection. Integration Complexities: Integrating third-party services through APIs can be complex and require significant technical expertise. Banks need to invest in the necessary infrastructure and talent to manage these integrations effectively. How Wibmo is Revolutionizing BaaS Wibmo, is a leading provider of digital payment solutions, and at the forefront of revolutionizing BaaS. Wibmo’s innovative approach combines advanced technology with deep industry expertise to offer comprehensive BaaS solutions that enhance security, scalability, and user experience. Key Features of Wibmo’s BaaS Platform 1. Advanced Security Protocols: Wibmo employs cutting-edge security measures, including multi-factor authentication and real-time fraud detection, to ensure the highest level of transaction security. 2. Seamless Integration: With robust API support, Wibmo’s BaaS platform allows for easy integration with existing banking systems and third-party applications, ensuring a smooth and efficient implementation process. 3. Regulatory Compliance: Wibmo’s platform is designed to meet stringent regulatory requirements across different regions, providing banks and fintech companies with peace of mind. 4. Customizable Solutions: Wibmo offers white-label solutions that can be tailored to meet the specific needs of banks and their customers, enhancing brand value and customer loyalty. Wibmo’s Impact on the Banking Industry Wibmo has successfully implemented its BaaS platform with several leading banks and fintech companies, demonstrating the transformative potential of its solutions. By providing secure, scalable, and innovative BaaS services, Wibmo is helping banks to navigate the complexities of the digital age and

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Harnessing Digital Payments for a Greener Earth

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As we celebrate Earth Day this year, it’s crucial to reflect on innovative solutions that contribute to environmental sustainability. One such solution gaining traction worldwide is the revolution in digital and mobile payments, particularly Unified Payments Interface (UPI) and Quick Response (QR) code payments. This technological advancement not only streamlines financial transactions but also plays a significant role in saving forests, reducing paper usage, and mitigating environmental degradation. Embracing Mobile Payments Mobile payment solutions are rapidly gaining popularity worldwide, with an estimated 2.1 billion people expected to use mobile wallets by 2025, according to Statista. By encouraging the use of mobile payments, fintech companies are reducing reliance on physical cards and cash, leading to fewer resources being used in the production and distribution of these materials. The Rise of UPI and QR Payments The emergence of UPI and QR payments has transformed the way individuals and businesses conduct transactions. With the convenience of mobile phones, users can transfer money, pay bills, and make purchases seamlessly, eliminating the need for physical cash and paper receipts. This transition to digital transactions has been accelerated by government initiatives and technological innovations, making financial inclusion a reality for millions. Saving Trees, Reducing Paper Usage One of the most significant environmental benefits of UPI and QR payments is the drastic reduction in paper usage. Traditional payment methods, such as cash and checks, rely heavily on paper-based documentation, including currency notes, receipts, and invoices. According to the World Bank, the global paper consumption for currency notes alone amounts to billions of tons annually. By shifting towards digital payments, we can significantly decrease the demand for paper currency and receipts. A study by the United Nations Environment Programme (UNEP) estimates that transitioning to digital payments could save millions of trees each year, mitigating deforestation and preserving vital ecosystems. Mitigating Carbon Footprint In addition to saving trees, the widespread adoption of UPI and QR payments contributes to reducing carbon emissions associated with traditional banking and payment processes. Printing, transporting, and disposing of paper currency and receipts require significant energy resources and emit greenhouse gases throughout their lifecycle. A report by the Global e-Sustainability Initiative (GeSI) suggests that digital payments have the potential to reduce carbon emissions by millions of metric tons annually. By minimizing the need for physical infrastructure and transportation, digital transactions offer a more environmentally friendly alternative to traditional banking methods. Encouraging Green Investments The global investment in renewable energy surged to $378.9 billion in 2023, as reported by the International Renewable Energy Agency (IRENA). Fintech platforms have increasingly become pivotal in driving these investments, offering sophisticated financial instruments and seamless integration with sustainable investment portfolios. These platforms empower both individuals and institutions to efficiently allocate capital towards a diverse array of renewable energy projects, sustainable infrastructure developments, and innovative environmental initiatives. Advancing Blockchain Technology Blockchain technology offers a decentralized and transparent platform for conducting financial transactions and verifying information. According to a report by Deloitte, blockchain technology has the potential to reduce the carbon footprint of financial transactions by eliminating intermediaries and streamlining processes. Moreover, blockchain can be used to create digital identities and track supply chains, ensuring the authenticity and sustainability of products. Promoting Sustainability and Financial Inclusion The shift towards digital payments aligns with broader sustainability goals, promoting financial inclusion and economic empowerment. By enabling individuals and businesses to access banking services through their smartphones, UPI and QR payments bridge the gap between the unbanked population and formal financial systems. According to the World Bank, expanding access to digital financial services can enhance economic opportunities for underserved communities while reducing their reliance on cash-based transactions. By empowering individuals to participate in the digital economy, we foster inclusive growth and sustainable development. As we commemorate Earth Day, let us recognize the transformative potential of UPI and QR payments in fostering a greener and more sustainable planet. By embracing digital financial technologies, we can conserve natural resources, mitigate climate change, and promote economic empowerment for all. As individuals and communities, let’s continue to harness the power of innovation to build a brighter future for generations to come. BaaS, Digital Payment, Earth Day, Fintech, Mobile Payments, Sustainability

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Navigating the Digital Fraud Landscape: How Wibmo’s Trident FRM Empowers Merchants to Combat Fraud and Enhance Customer Trust

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The Evolving Landscape of Digital FraudFrom phishing scams to elaborate whaling tactics, digital fraud has become increasingly sophisticated, posing significant threats to both consumers and merchants. Fraudsters adeptly exploit vulnerabilities and leverage stolen data to infiltrate webstores, perpetrating fraudulent activities with alarming ease. The Merchant DilemmaFor merchants, the prevalence of digital fraud presents a formidable challenge. Distinguishing genuine customers from fraudulent ones requires meticulous scrutiny, potentially introducing friction into the checkout process. However, striking the right balance between security and user experience is paramount, as excessive checks can deter consumers accustomed to seamless, one-click purchasing. Trident Fraud Risk Management (FRM) by WibmoIn response to the escalating threat landscape, Wibmo presents Trident FRM, a groundbreaking solution poised to revolutionize digital identity validation and verification. With real-time payments gaining prominence, the ability to swiftly discern between legitimate customers and bad actors has become indispensable. The Multilayered Approach of Trident FRMTrident FRM adopts a multilayered approach to fraud orchestration, leveraging cutting-edge technology and advanced analytics to accurately ascertain digital identities while maintaining efficiency and security. By seamlessly integrating with existing systems, Trident FRM establishes a framework of trust and security, empowering merchants to embrace real-time payments with confidence. Comprehensive Insights Across the Customer JourneyBeyond transactional validation, Trident FRM offers insights that span the entire customer journey. From initial discovery to final delivery, Trident FRM provides comprehensive coverage, mitigating risks and enhancing trust at every touchpoint. Empowering Merchants in a Fraught LandscapeIn a landscape fraught with fraudulent activities, Trident FRM emerges as a beacon of resilience and reliability, equipping merchants with the tools needed to navigate digital commerce with confidence. With Trident FRM, merchants can unlock new possibilities, safeguarding their businesses against fraud while fostering seamless, secure shopper experiences. Key Considerations for MerchantsAs merchants navigate the complex realm of fraud prevention solutions, several key considerations must be taken into account: — Accessibility to a robust ecosystem of security partners and technologies. — Enhanced visibility and access to industry-wide intelligence. — Flexibility and scalability to align with evolving business needs. — Option for a trial period to evaluate efficacy before commitment. — Complementarity with existing anti-fraud investments and optimization of ROI. — Provision of performance guarantees and benchmarks for reliability and efficacy. — Adaptive machine learning capabilities responsive to evolving fraud tactics. — Evaluation of true costs and benefits, including potential revenue loss from false declines. — Complementarity with authentication efforts, particularly in the era of 3D Secure. Merchant Fraud Facts and StatisticsAccording to the 2023 MRC Global Payments and Fraud Report, merchant fraud continues to pose significant challenges, with 71% of merchants experiencing an increase in fraud attempts over the past year. Additionally, the report highlights that false declines cost merchants an estimated $443 billion in potential sales annually, underscoring the importance of striking the right balance between fraud prevention and user experience. Furthermore, research by Juniper Research forecasts that global online payment fraud losses will exceed $20 billion by 2024, highlighting the urgent need for robust fraud prevention measures in the digital commerce landscape. In this context, solutions like Trident FRM play a crucial role in mitigating fraud risks and safeguarding merchants against financial losses. With digital commerce continuing to expand rapidly, merchants must prioritize fraud prevention strategies that not only protect their businesses but also enhance the overall shopping experience for consumers. Through innovative solutions like Trident FRM, merchants can navigate the complexities of digital fraud with confidence, ensuring the integrity and security of their online transactions. Author: Animesh Jha, Vice President — Fraud & Risk Management Wibmo A PayU/Naspers FinTech Company 'Ecommerce'], 'Fraud Detection'], 'Fraud Prevention', 'Merchant Services', ['Digital Frauds'

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Prediction, Prevention, and Detection of Fraud Attempts, the key to faster payment processing

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The global digital payment market size is expected to grow from USD 89.1 billion in 2021 to USD 180.4 billion by 2026. The promotion of digital payments worldwide and the increasing penetration of smartphones are major contributors. Besides, the pandemic has accelerated the adoption of contactless and wallet payments. India, too, saw exponential growth. Thanks to 1 Billion cards and more than 2 Billion prepaid payment instruments like wallets and other digital payment modes. But, cyberattacks are a major roadblock in the growth of digital payment solutions. These global attacks are the most critical challenges that the payment industry has been facing. New and evolving cyberattacks affect businesses by breaking into payment systems to get cardholders’ data. The evolving frauds include : a) Friendly fraud — Fraudsters make the purchase on a credit card, receive the product or service. Then demand a refund for a lost or short-shipped order, or file a chargeback through their credit card issuing bank. With the intention of receiving a full refund of the purchase amount. b) Affiliate fraud — Refers to any unscrupulous activity conducted to generate commissions from an affiliate marketing program. Newer types of affiliate fraud include using stolen data for lead generation or stolen credit cards to generate sales. c) Botnets- Submit large numbers of transactions to test the viability of stolen payment card credentials. d) Phishing — Fraudulent communications, through email, text, or call, that appear to come from a reputed source. e) Velocity attacks — Multiple monetary authorizations seeking to detect an active account and decipher CVV/Expiry Date values of a set of cards within a BIN range. f) Triangulation — Fraudster is the middleman between a customer and an unsuspecting merchant. The customer places the order through the fraudster (impersonating as a merchant). Then the fraudster uses stolen credit card information to buy those goods from a legitimate merchant. It is estimated that 9 million identities are stolen each year in the US alone, with a new victim of identity theft every two seconds. Since many people do not report identity theft, no true number of victims exists. According to the Central Statistics Office (CSO), by 2021, loss from cyberattacks would rise to US$ 6 trillion from US$ 3 trillion in 2015. The growing number of cyberattacks is a hindrance to the adoption of digital payment services. In a recent study by YouGov and ACI worldwide, consumers are increasingly concerned about digital payments fraud. As a result, exercise greater caution when using digital payments compared to a year ago. 71% of consumers are more concerned about scams and fraud because of Covid-19, compared to 47 percent of consumers last year at the onset of the pandemic. The study also indicates that banks continue to be the preferred first point of contact in event of fraud. Around 60% of respondents would first call their bank to block their account or visit the bank branch to file a written complaint. Though worldwide initiatives towards customer awareness are on the rise, the banks will need to continue to lead the way not only by increasing customer awareness but also by deploying modern and robust enterprise-level fraud management solutions. For a delightful customer experience, banks need to predict, prevent and detect fraud attempts even before the payment processing to pave way for frictionless digital transactions. Author: Sujit Kumar Mahato, Product Manager Wibmo A PayU/Naspers FinTech Company Fraud, Fraud Detection, Fraud Prevention, Global Digital Payments, Online Payments

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