Payments Evolution and the Omnichannel

Omnichannel sales opportunities are a huge plus for merchants, allowing you to sell to anyone, anywhere, and anyway you want. Your customers may be enjoying the positive advantages of omnichannel sales without realizing it. However, omnichannel sales are not all sunshine and roses, because we can’t overlook the increased fraud numbers that have come with it. This presents the merchant with a conundrum: What is the best way to seize the opportunities of omnichannel sales while maintaining an effective e-commerce fraud prevention strategy?
This is the reality of sales and payments in the digital age. Digital evolution provides us with an abundance of ways to sell, but it has also opened unprecedented fraud risks and opportunities for fraudsters. All of this speaks to the need to be vigilant and focused on your e-commerce fraud prevention methods, just as you are on keeping your website up to date and continually innovating your sales channels.
What Is Omnichannel?
Before we look deeper into what you as a merchant can do to protect your business from e-commerce fraud, we should take a closer look at omnichannel sales.
There are three primary omnichannel sales methods:

  • Brick2Click:  Integration between online and brick-and-mortar stores, providing seamless customer support with either channel.
  • Device2Web:  A device-centric omnichannel experience that allows customers to interact with the online store via a range of touch points. This category covers what’s called the Internet of Things (IoT), which is made up of Internet-enabled devices that network and communicate between other Internet-enabled devices and the cloud. This includes smartphones, tablets, digital wearables such as Apple Watch and Fitbit, thermostats and burglar alarms, home laundry appliances, and many other connected devices like Amazon Echo.
  • eAve2Web:  Supports a smooth experience for customers who make purchases through eAvenues (eBay, Amazon, Groupon, etc.) and the brand by assigning order IDs and customer IDs with a centralized database system. This sales method supports customer service with multiple options, including brick-and-mortar, online stores, and eAve.

As merchant and consumer, it’s likely that you’ve taken advantage of some of these omnichannel sales methods and can appreciate the ease-of-use they provide you as both a seller and a buyer. For most customers, however, how they make purchases may not be important to them—they simply want the item or service.
To better understand why your e-commerce fraud prevention strategy must be multi-dimensional, it helps to look at omnichannel sales from the customer perspective and how the browsing, buying, and delivery is really happening.

  • Shoppers are using their smartphones while in your store  They are doing research, comparing prices, looking for discount codes, and reading reviews.
  • Shoppers rely on digital content for their buying knowledge  More and more customers are influenced by social media, review sites, and online product testimonials when making purchasing decisions.
  • Shoppers are using multiple sales opportunities for a single purchase  Your customers may be starting their shopping process in-store and then completing the final sale online, or doing the opposite by conducting research online and then visiting your store to check the product before buying.
  • Savvy shoppers are keen to use multiple channels to get the exact product they want  To learn about your product, out-of-town or international customers may use multiple online sales sites, in addition to social media to get feedback from their social network, and they ultimately buy directly from you. The product is delivered to their nearest location (say, UPS depot) and then your customer goes there to pick up the product.
  • Shoppers are now open to using your in-store kiosks to buy  Many merchants have installed in-store kiosks that allow customers to order items not in stock, and then have the order delivered to their home or to the store for pick-up.

Your Omnichannel E-commerce Fraud Prevention Strategy
How do you protect your business from fraud while ensuring that your customers can buy from you when they want, how they want, whenever they want? It all comes down to data and how best to manage and track this overwhelming flow of traffic from multiple channels.

  • Combatting counterfeit fraud  This is a challenge for brick-and-mortar, online, and mobile sales. Knowing your customers, having secure authorization and authentication solutions in place, taking advantage of EMV technology, and maintaining secure customer records can help protect you.
  • Gift card fraud  This type of fraud comes from your savvier fraudsters who have learned that they can purchase gift cards with stolen credit cards and then use these gift cards to commit further theft. This theft can happen online with your website or in-store. To combat this e-commerce fraud method, ensure that you’re taking advantage of analytics to learn about your customers’ buying habits and integrating technologies such as IP intelligence and mobile geolocation.
  • Return fraud  This fraud happens when customers use an item and then return it in-store or via mail for a refund. Fraudsters use a stolen credit card to make an online purchase and then return the item in-store for a refund. Or, a customer makes a purchase online and then files a chargeback, followed by returning the item in-store for a refund. To combat these types of fraud, you need to strictly adhere to safe business guidelines. This includes having up-to-date refund policies, requiring proof of purchase, taking advantage of robust sales analytics—and have a chargeback solution in place.

Just as you’ve learned to take advantage of omnichannel sales opportunities, you need to learn how to enforce effective e-commerce fraud prevention strategies. These strategies must protect you at all sales points: in-store, online, via mobile apps, and through eAve sales channels.
To learn more about omnichannel sales risks and e-commerce fraud prevention, we urge you to download our white paper titled How Digital and Physical Commerce Convergence is Affecting Sales and Fraud Risks. You can learn more about Verifi solutions such as Intelligence Suite and Global Payment Gateway—or contact us with your questions, and we’ll be happy to help.