By Liron Damri, President of Forter.
Regulation will play an increasingly important role in shaping global eCommerce. For example, PSD2 is shifting the sense of accountability for fraud in the European Economic Area (EEA). And that’s not just for businesses based in EEA – any business that sells to customers in EEA is impacted.
As businesses seek to comply, they risk adding friction and complexity to their eCommerce funnel; our data already shows that high-friction funnels can drive cart abandonment up as much as 30%. Leaders that understand the ins and outs of these regulations can capitalize on exemptions and create a competitive advantage for their business.
Cryptocurrencies will further accelerate eCommerce fraud. Crypto makes bad actors more comfortable buying and selling information—it has created a rapidly expanding marketplace for consumer credentials. And wannabe fraudsters can also buy sophisticated tools to help them cheat and steal.
As the pandemic has brought older shoppers online, who are less savvy about protecting passwords, it is now introducing a wave of new fraudsters into the fray. Consequently, businesses must more actively protect their customers at every critical interaction along the eCommerce funnel, from sign-up to login to checkout and more.
Luxury brands with strong consumer recognition will invest more in their own direct-to-consumer experiences. The acceleration of eCommerce removes their dependencies on traditional retailers and creates opportunities to offer differentiated customer experiences.
That includes the sale of limited edition merchandise to their online communities and/or the creation of highly personalized recommendations and experiences via their websites. These companies are, therefore, taking on more responsibility for striking the right balance between fighting fraud and delighting customers.