How businesses can avoid fraudulent transactions in the run-up to the peak holiday season

For Fintech Finance News, attributed to James Hodgson, Chief Product Officer, Payit by NatWest

With the holiday season (and more spending) on the horizon, businesses will want to make the most of the peak season and capitalise on the run-up to the festive season. But amidst the frenzy of searching for the best deals, consumers might be less cautious than usual, leaving them more susceptible to phishing and APP scams. So, what steps can businesses take to protect their customers during peak consumer spending season and ensure their brand reputation and customer loyalty remain intact?

Phishing for deals

There are more opportunities than ever for scammers to exploit consumers. With omnichannel shopping experiences becoming increasingly common, the number of touchpoints in the purchase journey where scammers can seize personal data for fraudulent purposes is significantly higher. Over 2022’s festive period alone, the National Fraud Intelligence Bureau (NFIB) found that British consumers lost over £10 million to online fraud, equating to on average, a loss of £639 to each victim.

Products are advertised on multiple platforms with backlinks and click-throughs to the business’ website. Online shopping is still incredibly popular, albeit at the cost of the high-street with 37% finding reduced footfall. However, if consumers are not carefully watching for sites with security certificates, they are left open to serious scams. UK Finance cites that 77% of APP fraud cases originated from online sources and NFIB cites that over half of respondents argue social media platforms to be the most likely platform for shopping fraud to occur.

However, the cost of e-commerce fraud is far greater than just the financial loss to consumers. It can leave fraud victims feeling vulnerable and less confident to make online purchases. Victims of APP and phishing scams may feel discouraged to return to online stores where the offense took place. Trust is paramount in business-consumer relationships, and if an experience leaves a customer in a vulnerable position, it is sure to impact their likelihood of becoming a return customer.

Putting personal data in the hands of the customer

A third of UK consumers highlight data security and payment encryption as their largest payment concern. But what can businesses do to easily combat payment concerns? When it comes to improving security for consumers, adopting watertight payment methods is an easy first step.
Open banking solutions, like Payit by NatWest, are a simple and secure way to help consumers make purchases, giving them the confidence to make the most out of their holiday shopping. By allowing financial data to be shared between banks and 3rd party service providers, without the need to share bank details or personally identifying information, open banking puts customers in control of their personal data.
As a way to simplify transaction chains, open banking removes the need for merchants to store customer billing data. Using open banking solutions reduces exposure to more detrimental fraudulent offences such as identity theft.

Building better trust

Complicated online payments with multiple areas for input of financial data and personal details are known to put off customers. To retain these customers and allay fears of fraudulent payments, businesses must build seamless shopping experiences into their online offerings. By creating legitimacy and security at the checkout, open banking can bolster consumer trust in the business they are buying from. Trusted relationships are key to business success. And with open banking, businesses can ensure they make the most of the opportunity that the holiday season presents to drive crucial year-end revenue.

And consumers can shop in peace, knowing their data is firmly in their own hands.