In a recent podcast with PYMNTS, i2c’s Nathan Wu-Falkenborg, vice president of global strategy and analytics, spoke on the topic of fraud in emerging payment technologies like virtual cards, digital issuing, and buy now pay later (BNPL) features.
Based on real-world data, he mentioned that criminals aren‘t necessarily compromising new payment options and emerging financial technology. Instead, criminals are using identity theft/fraud and then use these new payment solutions as a vehicle.
As a result, companies who want to get serious about mitigating fraud risk should focus on two key areas:
- Identity verification in transactions: This is where FIs are collaborating with the customer and other stakeholders to confirm the voracity of the transaction. For example, 3DS transactions where the merchant is providing information, the cardholder is engaged, and the issuer [processor] can make the smartest decision based on all of the information available within the transaction.
- Identity authentication at origination: This is the commonly accepted method(s) of know your customer (KYC). But FIs who use this method of identity verification in origination as a standalone, aren‘t doing everything they should be doing to mitigate identity fraud risks.
In this podcast, Wu-Falkenborg goes into additional details about using behavioral biometrics, configurable fraud rules, and other advanced technologies to effectively manage fraud risks– all in conjunction with the critical role that humans should play to supplement technology.
Be sure to listen to the full podcast below!