Evil Twin

It’s time to decouple Cyber Monday from cyber fraud

The biggest online shopping day of the year needs to lose its evil twin

The term ‘Cyber Monday’ was coined back in 2005 in a press release by the National Retail Federations online branch, Shop.org, with the intent of encouraging shoppers to try shopping online as an alternative to or extension of Black Friday. Eleven years later, Cyber Monday has earned the title of biggest online shopping day of the year. As shoppers continue to hunt deals, there is significant rise in online shopping across the US holiday weekend, starting with Thanksgiving and continuing straight through to the following Tuesday.

This year will likely be no exception, as analysts predict record breaking growth for the holiday shopping bonanza as consumer purchasing continues its shift from brick-and-mortar stores to the Internet. According to the Adobe Digital Insights report, online holiday sales will grow 11% overall compared to 2015, reaching $91.6 billion between November 1 and December 31. Sales on Black Friday are expected to increase over 11 percent also, and reach $3 billion while Cyber Monday sales will expand by 9.4% to $3.4 billion. The biggest growth rate is expected to occur on Thanksgiving Day, with a 15.6 percent year-over-year increase. Analyst firm eMarketer is estimating online holiday sales of $95 billion while the Deloitte Holiday Survey is predicting an even more robust ecommerce performance — $96 to $98 billion – any way you look at it – we are seeing robust growth.<

While Black Friday and its sister Cyber Monday both stem from a US holiday, the global nature of the web has seen a rising demand for similar sales across the globe. For example, the UK has embraced both days, with Black Friday now being billed as the biggest shopping day of the UK holiday season, and last year took in over £3.3 billion, combined with Cyber Monday.

Instead of a granular shopping experience, where shoppers hit brick and mortar stores on Black Friday and save their e-shopping until Cyber Monday, they are increasingly doing their online shopping across a range of days, including Thanksgiving. Some retailers take a direct hand in promoting this behavior by extending sale dates – like Amazon and its strongly promoted “Black Friday Week” sales.

This infographic tells the tale from 2015, Cyber Monday spending grew by 21% across all devices, with mobile spending seeing the most growth at 53%. Last year was the largest year on record, according to Adobe, who found that online orders in the US topped $3.07 billion, noting a growth of 16% over the last year.

Like an evil twin, as Cyber Monday grows, so does cyber fraud. It’s not just the shopping holiday everyone’s been waiting for – it’s also a cybercriminal Christmas. Fraudsters will take advantage of the increased volumes at this time of year. They typically lay their plans months in advance by seeding sleeper accounts to bypass age-checks on new accounts, have their stolen credit cards ready to cycle through on websites as they attempt large purchases, and have personally identifiable information culled from the web, or bought from the dark web from previous breaches, ready to use. This data is used in either account takeovers or fraudulent account creation. Fraudsters make up a tiny fraction of the overall number of users on Black Friday and Cyber Monday, but they can and still will do a lot of damage. They choose times of high-volume traffic to hide automated purchasing activity that might otherwise be noticed during other times of year.

Legitimate cardholders are sometimes turned away by tough, rules-based security measures, reducing customer satisfaction and sometimes driving the frustrated customer away. But during spike shopping events like Black Friday and Cyber Monday, retailers will lower their threshold for declines. Fraud costs retailers $9 billion every year but false positives cause over $118 billion in losses. With greater competition in the retail sector than ever before, retailers are understandably loathe to turn away customers when the holiday stakes are so high.

There shouldn’t have to be a trade-off between security and sales, and it doesn’t have to be any longer. Higher accuracy and fewer false positives are possible with existing technologies: passive biometrics and behavioral analytics. Mobile shopping in particular needs new methods of authentication, ones that are fast and secure and doesn’t interrupt the shopping experience with insulting two factor authentications or easily-stolen knowledge-based authentications. In fact, instead of looking at fraud as a cost center, by implementing passive biometrics and behavioral analytics as a part of your fraud solution, especially for the mobile experience, you can focus on the good customers, removing friction and eliminating false positives – turning it into a revenue center.

Cyber Monday and cyber fraud don’t have to be tied together like twins. If you know your customer is in fact a good customer, you’ve eliminated the risk in making a judgment call and can begin to decouple volume of transactions from risk. As Cyber Monday transitions to a season, ensuring that merchants have good understanding of customers can result in saving operational costs in manual reviews. Plus, with this confidence, we can make the customer’s experience as pleasant as possible by relying on passive biometrics and behavioral analytics, keeping good customers, and making the fraudster’s job tougher than ever.   —

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