Why Trust the Future of Fraud Prevention

Monday, April 27th, 2020

Fraud prevention has come a long way and tech has played an invaluable role so far. Still, fraud rates are on the up and retailers know they aren’t safe. So does that mean we need to rethink our strategy when it comes to detecting and stopping fraud before it happens?

According to data from a TransUnion report titled Ecommerce in 2020, mobile eCommerce payments went up more than 30 percent in 2019 compared to the year before.

And of course, cybercriminals have also been working round-the-clock to penetrate m-commerce security defenses and steal from merchants and customers using the platform.

The Chicago branch of TransUnion, a credit reporting company, analyzed 10 billion transactions initiated in 2019. Surprisingly, it found a 118% increase in possible fraud.

Check the most recent stats and the same is true for many other forms of online transactions. Right now, merchants rely heavily on AI and machine learning technologies to verify customer identity, and detect any fraudulent transactions before they occur.

But one payment expert, Brad Wiskirchen feels we need a change in approach when it comes to fraud detection and prevention.

Expressing his opinion in a post that appeared in digitaltransactions.net, Mr. Wiskirchen suggests TRUST as an alternative route.

Trust is no new piece of tech or software. It’s just the five letter word known to all and sundry. But how does trust work and how is it different than AI?

Wiskirchen’s approach builds on customer identity verification as a fraud-prevention mechanism. The difference is this time, a merchant authorizes a transaction ONLY if they TRUST the identity of the person initiating it.

“For retailers, it comes down to one critical question; “Can I trust the identity of the individual initiating this payment as a legit customer?” writes the expert.

And for the icing on the cake, trust verification happens in real-time which allows the merchant to actively take part in spotting and stopping fraud. But that’s not all, Wiskirchen sees trust verification as the next level of customer engagement for retailers.

Many ecommerce processes involve active business-customer interactions and the same engagement can prove useful in fighting fraud. Verifying the identity of customers through trust means a livelier engagement that may mean more business in the future.

The verdict

Tech has played an invaluable role so far, but there’s no harm in incorporating human agents in the fight against fraud.

If trust verification will mean taking down two birds with a single bullet then we should consider making the shift.