Buy Now, Pay Later: The Latest Target for eCommerce Fraudsters

"Buy now, pay later" purchasing methods are becoming serious targets for eCommerce fraudsters as of late. Prevent any issues with these tools.

Buy now, pay later (BNPL) options are becoming increasingly popular among online shoppers. BNPL transaction volumes are expected to reach $680 billion within three years. 

BNPL transactions in the eCommerce industry aren't just a hit with consumers. However, they are also fast becoming a favorite target of eCommerce fraudsters. 

Are you're thinking about offering BNPL options to your customers? If so, watching out for fraud is essential.

Continue reading to find out why BNPL transactions are ripe for eCommerce fraudsters. As well as what actions you can take to protect your business from eCommerce fraud.

The Rise of Buy Now Pay Later (BNPL)

Buy now, pay later features allow consumers to split transactions into installments. These are typically interest-free and usually don't require a credit check.

The ability to split payments into smaller amounts makes BNPL transactions attractive to consumers. As a result, BNPL is very good for growing online sales.

Thanks to the benefits to consumers and merchants, BNPL services are growing at a rate of 39% per year.

How eCommerce Fraudsters Are Taking Advantage of BNPL

Currently, there is no regulated system that requires BNPL services to conduct credit checks on consumers. 

Thanks to this, eCommerce fraudsters are able to create false accounts. They make one purchase using BNPL and then close the accounts as soon as they receive the items. 

Another way eCommerce fraudsters are taking advantage of BNPL is through account take over fraud (ATO).

ATO is an old form of eCommerce fraud. Here, fraudsters break into genuine customer accounts. They either use the customer's card to make payment or test out stolen cards.  You can find more information about different account takeover use cases and our Account Protect solution here.

Finally, eCommerce fraudsters are also guilty of employing chargeback fraud with BNPL. Chargeback eCommerce fraud can be especially expensive because of the fees involved. Merchants lose roughly $3.48 per dollar from chargeback fees. 

How to Protect Your Business From eCommerce Fraudsters

Fortunately, BNPL hasn't triggered eCommerce fraudsters to create new types of fraud. This means that authenticating customers and having fraud prevention measures in place are still effective steps for companies that offer BNPL.

If you are looking into offering BNPL payment options, it's imperative that you take fraud prevention measures to protect your business from potential eCommerce fraudsters.

One of the best ways you can guard against eCommerce fraud is through AI technology. Solutions like Vesta enable businesses to evaluate every transaction before it takes place. Vesta allows you to increase your transaction acceptance rate while dropping fraud costs to zero. 

Drop Your Fraud Costs to Zero with Vesta

In today's age, it's almost impossible for businesses to protect themselves against eCommerce fraudsters without the help of technology. 

Are you looking for an easy, rock-solid way to immunize your eCommerce business against fraud? 

Vesta Payment Guarantee solution offers instant transaction guarantee for online merchants enabling them to grow revenue with higher approval rates of legitimate transactions.

Through a combination of advance machine learning trained on our consortium data, Vesta conducts accurate risk assessments in milliseconds. Vesta Payment Guarantee solution assumes 100% of the cost of fraud for any transaction we approve. 

Drop your fraud costs to zero and sign up for a free demo today.