• Aaron Begner, GM of EMEA at Forter


• 16.06.2022 03:00 pm
#BNPL

It’s no surprise that Apple has introduced a buy now, pay later (BNPL) solution with Apple Pay Later, with BNPL offering an efficient and user-friendly way for consumers to make purchases of any size.

According to GlobalData research, the BNPL sector is estimated to be worth $166bn by 2023. Retailers are taking advantage of this growth, offering BNPL solutions to customers at checkout to give them more payment options, and more favourable lending terms to purchase items. Although there are still aspects of BNPL schemes that need to be addressed, such as regulation and data privacy, it is an efficient and user-friendly way for consumers to make purchases of any size.

However, the near-instant decision-making associated with these transactions, unfortunately, makes BNPL schemes attractive for fraudsters. There is less risk for bad actors to abuse these systems, due to it being easier for them to directly access goods or services. This inevitably leads to an increase in chargebacks and lost retailer revenue.

To prevent rampant fraud, the security gaps in BNPL platforms must be understood. Soft credit checks are a popular solution, but they commonly fail to pick up anomalies such as misspelled names, phone numbers, or compromised user accounts that have been sourced through phishing attacks.

Apple will surely not be the last Big Tech company to introduce a BNPL solution. Therefore, retailers offering this payment method should look at investing in state-of-the-art, automated fraud solutions that can make decisions in real-time, instead of rules-based fraud detection models. Using the former will enable retailers to quickly detect – and respond to – fraudulent transactions”