Threat of fraud in alternative payments

Thursday, 20th February 2014 published an article about threat of fraud in alternative payments.

"The transaction revenue of alternative payments today accounts for $212 billion of eCommerce payments globally and arecent WorldPay reportshows that they will become increasingly important in the next couple of years.Markus Rinderer, CEO atPAY.ON, andKieran Mongey, Senior Fraud Consultant atReD, share the opinion that, thealternative payments landscape is complexand, with the challenge of evaluating which alternative payment method should be implemented in each market, the threat of fraud in alternative payments must also be considered."

Threat of Fraud in Alternative Payments

"While the level of fraud in alternative payments is currently low compared with card fraud, it should not be ignored. Tactics deployed by fraudsters against alternative payments include network and phishing attacks, and money laundering.Network attacks have been a successful tactic used by fraudsters, mainly because some payment methods do not use a checksum tool. This enables fraudsters to manipulate and freeze the URL between a payment provider and a merchant, so enabling manipulation of payment vouchers."

"Phishing has also become more prevalent as some payment methods do not enforce second-factor authentication. This allows fraudsters to hack into accounts using key-logging software and to glean information about passwords and account details that have been entered by the consumer.Fraudsters have also been successful in laundering money through wallet type structures via B2B or B2C relationships within the wallet. This can be difficult to detect and may leave victims exposed to fraudulent websites and without protection from fraudulent purchases."

"In order to prevent fraud in alternative payments, PSPs/ISOs and merchants should cross-check reference and account details in order to identify any anomalies.Many alternative payment methods are processing transactions through in-house rules and scoring engines today. This will ultimately drive declines much like bank declines, so how does this impact conversion, customer experience and merchants competitive position in terms of payment acceptance? And how does this align to the costs of processing alternative payments? All these considerations must be aligned to the risk exposure these solutions represent."

"The key consideration from a fraud perspective is that the fraudster will always find the weakest link. If merchants strategies are card centric, it will not be long before the fraudster identifies and leverages this.A fraud strategy should be payment agnostic and rely more closely on peripheral data held and exposed by the fraudster. This then becomes the key decision-making element of rules. Device, IP, connection, delivery, amount, product and history data is critical for exposing and detecting fraudsters. The payment mechanism is often the fastest changing piece of data within the payments landscape. A card, a wallet ID or payment method can frequently be changed while a delivery address will change far less frequently."

"Merchants, PSPs/ISOs should not allow fraudsters to jump from cards to alternative payment methods and so by-pass their traditional card centric rules and expose their alternative payment strategy to increased fraud."

5 things businesses need to know: The new EU Directive on consumer rights

Thursday, 20th February 2014

According to DigitalDoghnout, the European Union has passed a new directive on consumer rights that will have a major impact on most, if not all, ecommerce businesses.

"The main elements of this new legislation are designed to protect consumers and also provide added competition between enterprises. The directive is basically designed to align rights across the 27 EU member states, while providing more clarity on the way consumer rights are defined."

"1. An extension to the cooling off window

The first change of note in the UK that the directive dictates is the cooling off window (the time in which the consumer can cancel their order), is to be increased from the current seven working days to 14 calendar days, thus bringing it in line with many other members of the EU including Germany who already provide this for consumers. The directive also states that a consumer can cancel the order and return the goods for any reason."

"2. Changes to refund process

Consumers will have 14 calendar days following the purchase date in which they are eligible for a refund for returned goods.Potentially the most controversial part of the directive is that a refund for the standard delivery option must also be included when paid. That being said one saving grace is that businesses do not have to refund the delivery cost until they have received the goods back from the consumer.The changes to refunds incorporate more detail including how to handle returns that are damaged due to unreasonable care."

"3. An end to pre-ticked opt-in boxes

Although having pre-ticked opt-in boxes has been a frowned-upon practice for quite a while now, it still happens. The new directive will put an end to this. The legislation defines that it will no longer be acceptable for websites to contain pre-ticked boxes that cross sell of offer extras during the sales process."

"4. No more Buy Now buttons

Confirm order buttons at the end of a checkout process will need a radical change according to the directives documentation. Currently the usual best practice is to have a button stating Confirm Order or Buy Now. Under the new legislation this will no longer be sufficient.These buttons will need to provide context and make it clear that a contractual agreement is being entered into. The regulation itself highlights a suggestion for the content of the buttons as Order with obligation to pay.As an experienced conversion optimisation strategist this is the change that Im looking forward to the least. Getting users to commit to purchasing online has enough challenges as it is and adding in this extra dimension is only going to make the process appear more committal, which could confuse consumers.The EU is attempting to safeguard consumers from buying or entering into a contract that they didnt want in the first place with this change which I can sympathise with. However this change will mean companies will have to need think hard about what copy and context they want the content to portray while managing anxieties and additional questions that this could bring about."

"5. When it will come into effect

June 13 this year is the date you need to circle on your calendar. The directive was actually passed in December 2012 but the changes mooted in the document will not become law until this summer. There are a lot of changes in this directive and it is not realistic to highlight everything here but if you want to find out more about the new legislation seehere."

What is Facebook really for? - infographic

Wednesday, 19th February 2014

[caption id="" align="alignnone" width="600"] Source Brandignity[/caption]

Digital sellers in Spain see increased sales for 2014

Wednesday, 19th February 2014

According to this, more than 90% of e-commerce executives in Spain have declared they expect an increase in sales, with 51% saying sales would grow by up to 10% and 40% looking for an even bigger gain in 2014.

"According to data from Foro de Economa Digital and marketing agency Kanlli, only 3% of respondents expect sales to decline. While the number of digital buyers is growing all the time, healthier sales will also come from higher spending by existing buyers. The same research unveils that 57% believe their average order value would climb by more than 10% in 2014."

"Results also point out that strong sales prospects are encouraging higher marketing spend. Almost three-quarters of retail e-commerce executives in Spain have planned to raise their digital marketing budget in 2014. Of those, 37% have declared that the increase would be up to 10%, while 35% expect extra investment of more than 10%. One-quarter have mentioned they would maintain the same budget for digital marketing in 2014 and 3% are looking to cut back."

"Findings reveal that online merchants in Spain will increasingly cater for mobile shopping and buying. Only 53% of e-commerce representatives have stated that their websites are currently mobile-optimized, but all of the remaining 47% plan to adapt their websites. A further 4% already have a mobile application up and running."

"Research also identifies two key trends shaping the market: showrooming and multichannel sales. Most executives are looking for a rise in multichannel sales in 2014, with 71% saying these would increase. Of that group, 24% believe most sales involving multiple channels would be completed online. "

E-retail rolls in 2013 (US)

Tuesday, 18th February 2014

According to this,E-commerce spending increases nearly 17% in 2013, and 16% in the fourth quarter of last year, in the U.S. .

"Online shoppers in the United States spent $69.2 billion in the fourth quarter of 2013, up 16.1% from approximately $59.6 billion for the fourth quarter of 2012, according to figures released today by theU.S. Commerce Department. Total retail sales, meanwhile, increased 3.8% year over year."

"E-commerce sales accounted for 6.0% oftotal retail salesin the fourth quarter, compared with 5.4% for the same period on 2012, according to the Commerce Department."

"For the full year 2013, e-commerce sales reached $262.51 billion, up 16.9% from the previous year, according to the departments seasonally adjusted figures. By comparison, total retail sales increased 4.2% year over year in 2013."

"On an unadjusted basis, the Commerce Department says e-retail sales, excluding foodservice, during the fourth quarter totaled nearly $83.57 billion, up 16.0% from the same period a year ago. It says e-commerce accounted for approximately 7.0% of the quarters unadjusted total retail sales of $1.201 trillion. Following the same method outlined above,Internet Retailercalculates e-commerce accounted for 7.7% of unadjusted retail sales of items consumers often purchase online. "

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