Fraud Skyrockets in Booming Online Food Delivery Market

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Attacks against online food and beverage businesses grew 79 percent in 2018. FinTech executive Monica Eaton-Cardone says total will continue to grow rapidly as fraudsters exploit an expanding, heavily time-sensitive market.

Monica Eaton-Cardone is widely recognized as a thought leader in the FinTech industry and a champion of women in technology.

Monica Eaton-Cardone, an IT executive specializing in risk management and fraud prevention, discusses why the food delivery market is more vulnerable to fraudsters.

"It is imperative that merchants and the payments industry work together to bring the fight to fraudsters. For merchants, this means they must have an efficient fraud detection system in place to stop bad transactions from going through."

A recent report from online security specialist Forter shows that attacks against online food and beverage businesses grew 60 percent in 2017 and an estimated 79 percent in 2018[1]. Monica Eaton-Cardone—an entrepreneur and IT executive specializing in risk management and fraud prevention—says online food ordering, which is characterized both by exploding growth and the need for rapid transaction processing, will continue to be avidly targeted by fraudsters.

Statista projects a compound annual growth rate of 23.8 percent for eCommerce in food delivery between now and 2022[2]. According to statistics compiled by the restaurant management SaaS firm Upserve, digital ordering and delivery has grown 300 percent faster than dine-in traffic since 2014. Online food and beverage ordering is by its nature a highly convenience-oriented market, and 45 percent of surveyed consumers say that offering mobile ordering or loyalty programs would encourage them to use online ordering services more often. Orders placed by smartphone and mobile are projected to become a $38 billion market by 2020[3].

Eaton-Cardone notes that the online food industry, more than most others, is under constant pressure to deliver high levels of service with speed and accuracy, which makes it especially vulnerable to fraudsters. To avoid upsetting customers and possibly losing business, merchants are forced to make instant decisions about the legitimacy of a purchase. Partly because of this, fraudsters often use food delivery orders to test the validity of stolen credit card details. This not only spells trouble for the cardholder, it can have serious consequences for the merchant. According to a recent survey, over 20 percent of shoppers blame the merchant for accepting payment from a stolen card[2].

“For all these reasons,” says Eaton-Cardone, “it is imperative that merchants and the payment industry work together to bring the fight to the fraudsters. For merchants, this means they must have an efficient fraud detection system in place to stop bad transactions from going through. It also means they must act on the data they have at hand. A card decline may mean a lost sale, but it can also mean that card identity theft has been prevented.”

On the industry side, she says, battling fraud begins with a realistic view of what is actually happening. Fraudsters are increasingly organizing themselves into highly specialized fraud rings, which are difficult to identify and stop. While the returning individual offender rate has decreased, fraud rings have grown by 26 percent in the past year[1]. Also, the prevalence of loyalty programs and customer accounts in the food and beverage industry makes retailers susceptible to account takeovers[2].

To deal with these issues, credit card companies, Eaton-Cardone suggests, might implement predictive analytics into their existing fraud detection workflows. Artificial intelligence software could be used to analyze and score credit card transactions in the same way banking transactions are analyzed. Whatever tools are used, she says, it is necessary that the industry, like the merchants, not only gather information but act on it.

Monica Eaton-Cardone frequently discusses fraud prevention, FinTech and security best practices at industry conferences and events. She has been a featured panelist at TRUSTECH, the IATA World Financial Symposium and TRANSACT, and is also available for interviews, panelist opportunities and future speaking engagements. She attended the Women in Stem Conference 2019 on May 22 in London, UK. For more information, visit http://monicaec.com.

About Monica Eaton-Cardone:
An acclaimed entrepreneur, speaker and author, Monica Eaton-Cardone is widely recognized as a thought leader in the FinTech industry and a champion of women in technology. She established her entrepreneurial credentials upon selling her first business at the age of 19. When a subsequent eCommerce venture was plagued by revenue-leeching chargebacks and fraud, Eaton-Cardone rose to the challenge by developing a robust solution that combined human insight and Agile technology. Today, her innovations are used by thousands of companies worldwide, cementing her reputation as one of the payment industry’s foremost experts in risk management, chargeback mitigation and fraud prevention. As CIO of Global Risk Technologies and COO of Chargebacks911, Eaton-Cardone leverages her global platform to educate merchants on best practices in fraud prevention and to spotlight the competitive and economic advantages women can bring to the technology workforce. Her nonprofit organization, Get Paid for Grades, invests in students to inspire a new generation of innovators. Get to know Eaton-Cardone at http://monicaec.com.

1.    Groenfeldt, Tom, “Expanding E-Commerce Keeps Attracting Fraudsters, Forter Finds,” Forbes, March 12, 2019.
2.    Raab, Eyal, “Ecommerce Fraud Cooks Up Trouble in Food Delivery,” Multichannel Merchant, May 21, 2019.
3.    Everett, Holly, “19 Online Ordering Statistics Every Restaurateur Should Know in 2019,” upserve.com, February 12, 2019.

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