River Island bring their experience to Payments Summit 2013
E-commerce is increasingly proving a route in for criminals to commit fraud in-store, which is being made possible by most retailers' lack of integration of fraud solutions across their multiple channels. by Glynn Davis
Ahead of participating in a panel discussion at The Retail Bulletin Payment Summit on June 19th Steve Frame, head of safety and loss at River Island, highlights how this is proving a problem for many retailers and is holding back their levels of potential sales online.
Steve joins speakers from Marks and Spencer, Google, Carphone Warehouse, CoffeeMob, Visa Europe, Chase Paymentech Europe and more at this one-day interactive event. Click here to register.
The reality for most retailers is that their fraud solutions have been developed separately for their stores and their e-commerce operations. As the channels increasingly merge – through the likes of click & collect and reserve online - then Frame says problems are increasing.
“It’s easy to commit fraud online and it’s now coming offline as e-commerce is the way in, through click & collect. It’s now very muddy,” he says.
At River Island Frame has sought to mitigate the problem through the creation of a single team that encompasses both payments and fraud, which then handles the integration of solutions across the company’s different channels.
“In most companies each channel has its own focus and strategy, with loss prevention not merged in any way. The challenge is to get them to talk together. But most importantly we’ve got payments and fraud together. They both sit with me and I can then cross the channels together,” explains Frame.
By bringing people together he says it is possible to connect fraud across the channels, which will lead to a greater understanding of the fraud journey in today’s multi-channel environment.
Highlighting the present lack of a joined-up infrastructure within most companies he cites a situation where a retailer might be looking to introduce PayPal online. The commercial team will come up with a specification and the IT team will then build it. “Only then will they contact the fraud team and by this time it is so far down the line that it is difficult to go back as it would involve changing the infrastructure,” he suggests.
Although this does not present a fraud risk, Frame says it impacts the business commercially through the inevitable refusal of safe transactions because all purchases across the online and offline channels will have been treated the same.
“With different transactions you’ll have different fraud and see different risks. You can’t treat them the same. There is a significant risk from not seeing payments properly across the channels as some sales will be missed,” adds Frame.
This is also happening on an international basis: “Retailers are opening up to international trade but they then only use UK fraud rules. Nigeria is a great example. Lots of companies have moved out of there but we’ve moved in, having introduced certain – high risk – fraud rules. We’ve no fraud in Nigeria and it provides a regular income for us.”
The problem for retailers, according to Frame, is being exasperated by the fact e-commerce is moving so fast that companies are all too often looking at the commercial benefits of expanding into new areas without taking into account the costs.
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