This year at Merchant Payments Ecosystem (MPE) Berlin, Sift joined more than 1,300 attendees for three days of world-class content delivered by industry leaders in the merchant payments space. The 16th annual MPE conference connected merchants with acquirers, PSPs, industry experts, and startups from more than 40 countries.

During the conference, key themes emerged from the panels and discussions, including fraud being the biggest challenge in payments. As payment methods evolve and technology advances in the coming years, fraud prevention will rely more on machine learning and artificial intelligence and less on human manual review, making platforms with intelligent automation critical to the success of businesses.

Sift Trust and Safety Architect Brittany Allen presented keynotes and participated in panel discussions on the types of fraud targeting gaming and gambling companies, as well as how to measure the effectiveness of risk management strategies. See insights from these sessions and learn about emerging fraud trends discussed at the conference below.

MPE23 BAllen

 

New frontier for payments: gaming & gambling

During a keynote presentation, Allen provided an introduction to the types of fraud targeting igaming and gambling companies by examining the tools and information readily available for fraudsters to purchase on the deep and dark web. Whether it’s batches of stolen accounts, one-time password (OTP) bots, social engineering scripts, and even fixed sports matches, these real-world examples demonstrate the need for dynamic fraud prevention to keep our communities of fans and gamers safe.

“You need to make sure you’re not just verifying an identity, but you’re verifying the identity. It’s too easy to say ‘this is a real name, it matches the birth date’ but it’s actually not the individual behind the account,” said Allen. “We’ll see people be used as mules who are willing to open new accounts and go through KYC checks on gaming and gambling platforms. But just because they’re the ones who are taking that action and using their identity to complete that, doesn’t mean they’re the ones who are going to continue using that account. We really need to keep in focus at all times who the person is within an account taking those actions.”

Watch the Sift keynote and group panel.

PSD2 and SCA regulations

The Second Payments Services Directive (PSD2) was intended to create more open and secure online payments across Europe, but it has presented merchants with new challenges. Most significant is the requirement of Strong Customer Authentication (SCA)—which, while adding more security, also potentially adds more friction. However, some fraudsters are getting around the regulation by making low value transactions that are exempt from SCA. 

Last year, the EU Commission opened consultations to revise PSD2 to better align with the rapid shift to digital payments induced by the pandemic. These revisions will lead to the creation of new legislation under PSD3, though it likely won’t go into effect until 2026 or 2027. These consultations have brought to light the need for more regulation for buy now, pay later (BNPL), a limit on exemptions for big tech, and more of a focus on behavioral biometrics standards for SCA exemptions.

Alternative payments hit the road

We may be just scratching the surface of possibilities when it comes to alternative payments. Mercedes-Benz is the world’s first car manufacturer using Visa’s Delegated Authentication and Visa Cloud Token Framework technology to enable seamless in-car payments. The payments are authenticated by biometric 2FA to both confirm the driver’s identity and prevent conversion drop. Mercedes foresees being able to pay from an electric car charging hub: leaving your car to charge for 30 minutes while shopping nearby, with all payments being made by the car as it awaits your return.

The dark side of fast and easy onboarding

The vast majority of fraud originates from organized fraud groups, but it’s becoming more challenging to weed them out as their actions more accurately mimic legitimate behavior. There’s a delicate balance between enabling seamless experiences for trusted customers, and making it too easy for anyone to game the system. Fraudsters are getting more advanced with their tactics, using methods like merchant-initiated fraud to create merchant accounts with acquirers using fake information, opening a business, or even buying a legitimate business to flip it to fraud once it passes the required checks. 

This trend makes it much more difficult to detect and block fraud. Businesses must adopt a flexible fraud prevention strategy capable of accurately preventing fraud and clearing the way for easy trusted-user onboarding. End-to-end fraud prevention platforms are critical for ensuring both trust and safety, but there’s more issuers can do as well, such as registering biometric data for merchants to compare at checkout.

Effective risk management strategies

One of the most important components of an efficient risk management strategy is being able to measure the success of fraud prevention efforts. It can help you make the case for additional tools and resources, as well as adapt to evolving fraud threats. During Allen’s keynote, she discussed how to effectively measure key performance indicators (KPIs), including how to choose metrics, tips for benchmarking against industry standards, and how to balance protecting revenue with generating revenue.  

“Whether it’s communicating success to your team, presenting to the board, or talking to leadership and arguing for resources, you have to be able to encapsulate what your approach is and communicate that via metrics that can be understood,” said Allen.

Watch the Sift keynote and group panel.

Related topics

alternative payments

fraud

fraud prevention

gambling

gaming

MPE berlin

PSD2

psd3

SCA

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