Fraudsters eyeing “unique exploits” of buy now, pay later - AiConnects.us
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Fraudsters eyeing “unique exploits” of buy now, pay later

Ai Editorial

17th January, 2022

The buy now pay later (BNPL) option continues to flourish. At the same time, the risk associated with such transactions, too, is being highlighted.

Just as they do with any new or novel payment method, criminals powering the #FraudEconomy have embraced the unique exploits of buy now, pay later options, highlighted Sift’s Brittany Allen. Speaking to Bloomberg, she said, “We have a seen an increase in fraud attacks on BNPL payment methods. We have seen 66% increase for Black Friday/ Cyber Monday weekend year over year between 2020 and 2021.”

“As the fraudsters become more aware of both BNPL payment option and also the unique qualities they offer and what they (fraudsters) can take advantage of, we expect to continue to see that increasing (fraud attacks). This is just the beginning,” she said.

Explaining how the scams take place, she said some of it is about evergreen fraud trend i. e. involving of stolen credentials obtained through phishing emails, account takeover or data breach attacks. And those being sold on the dark web and the deep web, and packaged around the name of a particular BNPL provider so that someone can purchase and use the credentials. “But we are also seeing unique styles of attacks. For example, usage of dead credit cards or ones which were legitimate or were real issued credit card numbers and now no longer active, and because fraudsters have all the time in the world to test different payment systems to see what methods work and what don’t (and post this commit fraud). Since some BNPL providers do not charge upfront, don’t take that first instalment at the checkout and fraudsters go through the existing loopholes and make those purchases.”

This is affecting both the consumer and the vendor/ merchant.

The onus is on BNPL specialists, even though they maintain that fraud checks and controls aren’t less stringent than banks, and they have extensive back-end fraud processes. Service providers need to understand which users have bad intentions. Also, whether the transactions are being carried out by humans or sophisticated bots for fraudulent purposes. Even merchants need to look for fraud indicators. One route is to combat account takeover (ATO) and this is a matter of concern in digital commerce today.

The digital commerce is space is never fool proof, there is always a way out. As Hubert Rachwalski von Rejchwald, CEO, Nethone recently pointed out: “Whenever it is mathematically possible to extract money from the system, someone would try to game it!”

By Ritesh Gupta

Ai Team

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