Fraud & Payments Survey 2020

Industries and job roles

The survey focused on professionals from four key industry groups:

• Retail - fashion, groceries, electronics, health and beauty and fast-moving-consumer-goods
• Travel & hospitality - transport and accomodation
• Digital goods - online gaming, gambling and event ticketing
• Marketplaces - taxi/cab services, food delivery and product/service delivery

Most participants work in a senior decision-making role, with 43% in a C-level role, either Chief Financial Officer, Chief Technology Officer or Chief Risk Officer.

Which department is the fraud team in?

Fraud teams are spread across five different business areas and there’s no standard or one size fits all. Traditionally fraud has been seen as a finance function, but today the highest proportion of teams sit in the technology department. The variation in team departments is a testament to the differences between merchants, complexity of fraud, and the multi-layered approach needed to tackle it.

What are the fraud team’s responsibilities?

As well as working across multiple business areas, merchant fraud teams are spinning a lot of plates. Alongside payment fraud, almost 70% of fraud teams are managing payments and over half are managing and account takeover fraud.

Which types of fraud are increasing?

We asked merchants which types of fraud have increased in the previous year. A significant number of merchants said that every form of fraud has increased, however greater numbers of merchants saw increases in newer forms of fraud - account takeover, promotion abuse and refund abuse. Download the full report to learn how this could be linked to wider environmental factors.

Do merchants think PSD2 has an impact on their business?

Most European merchants understand that Europe’s Second Payments Services Directive (PSD2) will impact their business. However, only around a third of UK merchants think PSD2 will impact them, even though the regulation will apply regardless of the UK’s departure from the EU. PSD2 regulation will be enforced from September 2021 in the UK, and earlier in many parts of Europe, so it’s critical for merchants to understand the implication and prepare in advance. Download the full report for more insights on merchant perceptions of PSD2.

How has Covid-19 impacted merchant business fraud operations?

At the time of the survey (August 2020) 46% of merchants said that the Covid-19 pandemic has had a positive impact on their fraud operations overall. These findings were largely consistent across industries, but there are some slight variations. Download the full report to learn more about the reasons behind the industry differences.

How has the business perception of the fraud team changed?

For most merchants, business perception of the fraud team has improved. At C-level, this is even more pronounced, suggesting that the improved perception has not been communicated to the fraud team, who should be proud of the great job they are doing.

This improved perception is especially true for merchants where Covid-19 has had a positive impact on their fraud operations. Covid-19 caused a huge surge in online transactions accelerated digitalization across industries. As online operations become the priority for most businesses, does this mean the fraud team is more valued?

What are the most important factors to identify fraud?

No two merchants are the same, and each business will prioritize different factors when identifying fraud. Despite industry variations, customer profile and order content are key factors for over 70% of merchants, with both these factors the most critical for almost a third of merchants. Fewer merchants see shared industry data as a key factor, which emphasises the importance of recognising merchant differences.

How often are merchants under attack from account takeovers?

We asked merchants how often they are victim of wide-ranging, high impact account takeover attacks that affect a significant number of customers. Across industries, merchants are facing between 2.6 to 4 major account takeover attacks per month. Marketplace and digital goods merchants are more likely to face a higher number of attacks - download the full report for a more detailed breakdown.

How many merchants report account takeovers to authorities?

Although most merchants are under heavy attack from fraudsters targeting their customer accounts, not all merchants have reported them to the relevant authorities in the past 12 months. Under Europe’s General Data Protection Regulation even breach of a single customer’s details must be reported, and breaches can carry heavy fines. UK merchants are the least likely to have reported attacks, followed closely by US merchants.

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