AS the holiday season approaches and consumers gear up for Black Friday deals, a surge in payment fraud threatens both individuals and retailers. Signicat, a pan-European Digital Identity solutions leader, reveals a concerning rise in various forms of payment fraud, emphasising the need for heightened security measures during the busiest shopping period of the year.
In an era dominated by digital payments and online shopping, cybercriminals exploit vulnerabilities in payment systems, posing a significant challenge to the security of financial transactions. With Black Friday just around the corner, the threat landscape becomes even more critical, necessitating a nuanced understanding of payment fraud and proactive measures to safeguard transactions.
The impact of payment fraud extends beyond financial losses, affecting end-customers and companies alike. For consumers, falling victim to payment fraud jeopardises financial well-being and erodes trust in digital payment systems. Companies face financial losses, reputational damage, and the need for substantial investments in security measures to counteract fraud incidents.
Juniper Research’s data from 2020 estimated losses of over €188 billion ($206 billion) in the retail sector due to fraudulent transactions between 2021 and 2025. A recent report from the same firm projects losses of €330 billion ($362 billion) associated with fraud between 2023 and 2028. As online shopping remains a primary cause of fraud, securing transactions becomes paramount during peak shopping times.
Asger Hattel, CEO of Signicat, highlights the challenges faced by companies in ensuring security and compliance amid rising fraud. Particularly during peak shopping times, companies need to enhance transaction security to build trust with end-users.
In response to the evolving threat landscape, consulting firms globally recommend adopting technologies like fraud prevention platforms based on machine learning or artificial intelligence. Signicat emphasises the importance of modernising processes with advanced technologies, including second-factor authentication using facial biometrics, as they are less susceptible to manipulation.
Jon Ølnes, Tribe Lead and Thought Leader at Signicat, discusses the significance of the European Digital Identity Wallet initiative in combating fraud at a European level. The initiative, with payment as a crucial use case, is expected to enhance security for both end-users and companies.
Digital identity solutions emerge as a key factor in fraud prevention. A recent study commissioned by Forrester Consulting on the Total Economic Impact™ (TEI) of Signicat revealed a 75% reduction in fraud costs, demonstrating the effectiveness of digital identity solutions in meeting regulatory requirements.
As Black Friday approaches, the focus on secure transactions intensifies, emphasising the importance of technological solutions and education to combat the rising wave of payment fraud.
