Studies expose gaps in digital commerce

Separate studies by Axerve and Arkose Labs highlight the need for security and payments orchestration as retailers rush to support multiple checkout options at all points of interaction. New technologies and trends in digital payments in 2022, published May 17, 2022, by Axerve, assesses digital commerce's impact on merchants.

Alessandro Bocca, CEO of Axerve, stated the white paper underscores a need to align digital methodologies and merchant capabilities.

"In order for merchants to harness the benefits of diverse payment methods for their customers, it is vital that the new forms of purchasing experiences that are emerging are met with an omnichannel and fluid approach and platforms capable of simplifying multiple payments for merchants," Bocca said. "This is an increasingly complex task meaning that retailers stand to benefit from an expert payment partner."

Bocca described payments as a "delicate phase [that] determines the transition from purchase intention to actual sale." It's essential for payments to be fast, frictionless, transparent, secure and compliant with PSD2 regulations, all of which requires payment orchestration, he noted.

Fraudsters profit

The Q2 2022 State of Fraud & Account Security report, published May 18, 2022, by Arkose Labs, shows a tenfold increase in fraud attacks by fraudsters whose earnings rival those of legitimate C-suite executives, according to Kevin Gosschalk, founder and CEO at Arkose Labs.

"Evolving bot and human-led attacks increasingly target fintech, gaming, and technology companies," Gosschalk said. "Simple automation is a thing of the past as attackers have proven to be quick learners and continue to find ways to sabotage businesses to increase their personal wealth."

Catching evolving attacks early requires deep insight into fraudsters' tactics and financial motivations, Gosschalk noted, adding that Arkose Labs analyzes billions of sessions each quarter to uncover the latest attack patterns. New findings indicate fraudsters are using new tools and resources to reduce barriers to entry, he stated.

Hot fraud trends

The Arkose Labs report highlighted the following popular and emerging schemes:

• Profit-driven attacks: The profit potential of account compromises, fake account creation, phishing and credential stuffing keeps these attack patterns top of mind for fraudsters.

• Automated account takeovers (ATOs): One in four accounts created in the first quarter of 2022 were fake, leading to promotion and free trial abuse.

• Intelligent, efficient bots: The first quarter saw higher than average bot attacks, driven by large-scale scraping and credential stuffing attempts. Scraping attacks increased by 60 percent in the first quarter, with credential stuffing accounting for 4 percent of all traffic.

• Low-and-slow human-led attacks: Human-assisted bot threats are increasingly persistent, targeted and difficult to detect as fraudsters attempt to stay under the radar.

• Industry-specific attacks: Industries were targeted in different ways and by varying attack patterns, researchers found. Fintechs saw 2.5 times more attacks in the first quarter than in the previous two years, with 75 percent targeting consumer logins. Other popular targets included gaming, tech, ecommerce and travel industries.

• Metaverse: Attacks on metaverse companies were up by 40 percent since the fourth quarter of 2021. Human-led attacks on metaverse companies were 68 percent higher than non-metaverse companies.

• Asian-based attacks: Asian-initiated attacks accounted for 40 percent of global cyberattacks, compared to 1 in 3 attacks originating in Europe and 1 in 5 attacks originating in North America. Attacks from China and India increased 70 percent compared to the fourth quarter of 2021.

"One thing is certain: the ROI for cyberattacks is greater than ever in 2022," Arkose Labs researchers wrote. "The digitalization of our lives and work means fraudsters can attack companies and threaten consumer trust long before a transaction takes place."

A copy of the Arkose Labs report is available at: www.arkoselabs.com/resourceasset/2022-q2-state-of-fraud-account-security-report/

Hot digital trends

The Axerve white paper cited additional research to reflect the following digital trends:

• Cryptocurrency: Investments in blockchain-based technology investments are expected to grow to $19 billion in 2024, according to Worldwide Semiannual Blockchain Spending Guide research conducted by IDC.

• BNPL: Installment payments are used for 2 percent of total ecommerce transactions globally, which is expected to reach 4 percent of the market by 2024, according to recently published data by FIS Global.

• Contactless in-store payments: Almost 50 percent of shoppers stated that they would not shop in stores that offer only payment methods that require direct contact with cashiers or shared POS terminals, according to Visa research that involved 2,000 small businesses and 4,500 consumers in eight strategic markets during the pandemic.

• Ecommerce tokenization for recurring merchant-initiated transactions: Global tokenization is expected to grow from $2.3 billion in 2021 to $5.6 billion by 2026, according to MarketsandMarkets.

"The technological response from the world of payments to the new forms of purchasing experiences with an omnichannel and fluid approach, are the platforms capable of satisfying increasingly complex and [personalized] needs, both from the point of view of the merchant and from that of the customers," Axerve researchers wrote.

A copy of the Axerve study is available at media.axerve.com/docs/whitepaper/Axerve-Whitepaper-DigitalPayments22-EN.pdf

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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