Buy Now Pay Later (BNPL): Identify and Tackle the Fraud Risks
Buy Now Pay Later (BNPL): Identify and Tackle the Fraud Risks
Improve experience for BNPL consumers while lowering fraud risk
As consumers embrace BNPL at speed, fraudsters are following suit and looking for opportunities to make a profit. The benefits that make BNPL so attractive for consumers–such as fast, easy access to credit that enables immediate possession of a product without paying in full–are also elements that open the door for abuse by fraudsters.
Types of Buy Now Pay Later (BNPL) fraud
- Identity Theft
Fraudsters often use stolen identities of good consumers to open new BNPL accounts. - Account Takeover
Account takeover (ATO) is even more insidious as it involves hijacking an existing account with its established access to credit and using that line of credit to purchase goods and services. - First Party Fraud
Also known as “no intention to pay,” “first installment default” and “early payment default,” it involves a legitimate purchase by a genuine consumer who wants fast access to funds to make a purchase and then defaults on the payments.
How LexisNexis® Risk Solutions Can Help Tackle BNPL Fraud
Performing simple authorization checks isn’t enough to solve the problem of fraudulent payments being processed. To reduce the risk of reputational damage and fraud, BNPL providers and retailers need to ensure they carry out enhanced fraud and identity checks at various points of the consumer journey – from account opening through to payment.
LexisNexis® Risk Solutions provides a holistic, multi-layered fraud defense with near-real-time risk assessment, such as recognizing bad devices or detecting behavioral anomalies in the interactions.
Recognize trusted users
Recognize new genuine users and returning customers to speed up transaction processing for these trusted interactions while thwarting fraud from suspicious activity.
Maintain customer experience frictionless
Gather information and perform checks behind the scenes, removing friction from the customer’s experience.
Mitigate Risk
Seamlessly detect high-risk devices, unusual transactions, and anomalous behaviors with near real-time risk assessment of new account openings and payment events.
Download the Exploding Growth of Buy Now, Pay Later (BNPL) Infographic, or the "How Buy Now, Pay Later is Disrupting the Credit Industry" white paper to understand the opportunities and fraud risks of BNPL.
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