9 out of 10 Singaporean merchants are victims of payment fraud
- FIS and Forrester dived into the challenges Singaporean firms face due to rising fraud levels.
- 9 in 10 Singaporean merchants lost revenue due to payment fraud which caused far-reaching consequences.
- Synthetic identity fraud and account takeover fraud were ranked top in causing operational and revenue losses.
- Singapore merchants are looking to invest in machine learning tools to manage fraud and mitigate card-payment fraud.
Nearly nine-in-ten Singaporean merchant respondents reported that their companies experienced payment fraud over the course of being in business with far-reaching consequences that are impacting their businesses’ bottom lines. Synthetic identity fraud and account takeover fraud were ranked top in causing operational and revenue losses.
The findings were from a Payment Risk Survey report by Worldpay from FIS and Forrester, that explores the latest payment fraud challenges that merchants face and their risk management strategies. The survey findings were published just in time for the ongoing Great Singapore Sale (GSS) that started on 6 June 2021. In addition, the Singapore Police Force recently issued an advisory to remind the public to be vigilant when shopping online and advised the public to be wary of scammers during this period.
WorldPay from FIS APAC general manager for global e-commerce Phil Pomford in an e-mail statement shared that, “As payments have evolved, so has fraud. Fraudsters have stepped in to capitalize on the pandemic’s disruption and have become more sophisticated as they seek targets online. Data from the authorities further indicate that e-commerce scams which include transactions on online marketplaces remain the top scam type in Singapore.”
Indeed, online retailers are common targets for fraudulent card testing activity, Pomford said, with this form of payment fraud being shown to rise the most in Singapore, as 70% of merchants surveyed reported higher instances of such fraud.
Key findings from Asia Pacific
The report is basically a survey of omnichannel and enterprise merchants from 11 countries, exploring the latest payment fraud challenges that merchants are facing and their risk management strategies. The key findings from Asia Pacific includes the growing trend in synthetic identity fraud with 61% of merchants in APAC reported higher rates of such fraud – the most amongst all regions globally.
Besides that, 84% of merchants in APAC reported losses in revenue due to payment fraud; with Singapore leading the chart. More than half (57%) of merchants in APAC reported substantial or significant impacts in costs for remediation of payment fraud victims in 2020.
What are the merchants’ plans to fight payment fraud?
What’s interesting is that more than one in four merchants (28%) in APAC are challenged by efforts required to implement payment security solutions like tokenization and 3DS2. When asked what payment initiatives they will prioritize in 2021, improving fraud detection and mitigation (44%) came up top for APAC merchants, above other initiatives such as improving payment experience on mobile (40%) and ensuring compliance with regulatory standards (38%).
The good news, Pomford said, is that almost all (96%) Singapore firms surveyed are dedicating resources to combatting and managing risk. “However, if there’s one definitive thing about payments fraud, it’s that it is constantly changing and requires ongoing diligence to defeat. Having robust solutions in authentication, tokenization or chargeback solutions represents only one piece of the revenue protection puzzle.”
Importantly, he added, merchants need to strike the right balance between managing risk and enhancing consumer experience. Fraud has far reaching consequences, and merchants who approach payment security as a holistic challenge will come out stronger in the long run.