As payment companies expand ways for consumers to make digital payments, 62% of North American merchants, bankers, and fintech providers expect more such payments within the next two years, says Forrester Research Inc. in its “Understanding the Evolving Payments Landscape” report released Monday.
Commissioned by Visa Inc., the report also found that 46% expect ways to make payments via the Web or on a mobile device will increase. This won’t be just for large merchants either. Forty-seven percent say more small businesses will rely on a mix of credit and debit cards and digital payments.
Yet, with additional merchants accepting digital payments, acquirers and banks will face new fraud threats, the report suggests. Sixty-one percent said that new payment technology make them more susceptible to fraud. “One downside of this advancement in payment technologies is that as payments get more innovative, so do fraudsters,” the report said. “Businesses are acutely aware of the new fraud risks that come with the adoption of new payment technologies”
When asked about the level of fraud concern for mobile banking bill-payments, 68% said they were concerned or very concerned. Similarly, 60% held that attitude about mobile wallets and digital wallets, and 58% did for peer-to-peer payments.
Forrester’s recommendation to contend with fraud associated digital payments is to use to a combination of tools and strategies. Among them is adopting artificial intelligence and machine learning to analyze payment data and fraud, using tokenization, and integrating fraud-management systems and research interface to make it easier to track potential fraud. Its other recommendations are to use advanced authentication techniques and to treat fraud management as a process and not as a single project.
The study, completed in March, surveyed 566 professionals internationally, encompassing one-third each from fintech providers, retail banking—including acquirers—and merchants.