Businesses have been challenged to incorporate fraud detection tools as more transactions move online and e-commerce becomes mainstream.
Speaking during the Pesapal - Caffè Session, the outgoing Pesalink chief security information officer Stacy Chege said that online fraud is a growing threat to our economy and to our personal financial security.
Merchants, she said, must safeguard themselves and their customers against online payment fraud by integrating payment gateways like Pesapal as a security checkpoint for online transactions.
'' Employing approaches that have been proven to be the most efficient in combating card and online payment fraud can minimise losses and chargeback,” Chege said.
Card fraud and buyer remorse are the leading instances of fraud for most merchants in Kenya.
In 2021, the Kenya National Bureau of Statics reported that data breaches like data extortion, data leakage, and data disclosure constituted almost 71 per cent of the cyber-attacks on Kenyan businesses.
“We securely authenticate any customer’s card and device details when they make a purchase online before a transaction ever reaches the bank,” Pesapal head of risk and compliance Anthony Irungu said.
Despite the substantial risk that fraud poses to businesses, many companies lack systematic systems and procedures for preventing, detecting, and responding to fraud.
Some of the fraud detection tools that Pesapal employs to reduce online fraud-related losses include, Payer Authentication (3-D secure), device identification and flagging suspicious transactions
Others are mapping out of high-risk countries and sectors, CVV or Card Verification Number (CVN) , and Address Verification Service (AVS).
As e-commerce continues to grow, cybercrime is on the rise.
To protect themselves, companies need to understand the pace, direction, and paths along which fraud is moving and the trends shaping the future of fraud management.
According to Pesapal, cardholders and merchants must also be vigilant and ensure they are prudent while transacting online.
''The rollout of EMV chip cards made it harder for fraudsters to pass off a counterfeit card at point-of-sale, now, all that criminal payment activity that used to happen in person has moved online,” Chege said.
She added that combatting online payment fraud is facilitated when the public is fully educated and aware of its types and the prevention methods available.
''People are reliant on the Internet; the possibility of being breached by hackers and fraudsters is growing, especially as socializing, online shopping and banking are carried out through personal computers or mobile devices,'' she said.
Pesapal Caffé Sessions is an initiative by Pesapal that aims to connect individuals, share learnings and transfer knowledge with a critical focus on the digital economy.