Voice Shopping On Target To Be Fraud Managers’ Next Hurdle
“Alexa, how do I prevent payment fraud as voice shopping becomes increasingly popular?”
This is a relevant question as voice-activated shopping remains on target to become the next big growth channel for e-commerce. 19% of consumers in the U.S. made purchases with voice-command technology in 2017 (mainly with Amazon Echo and Google Home digital assistants), says a survey by Walker Sands, while 33% say they have plans to use voice shopping by the end of 2018. Meanwhile, both Walmart and Target now offer voice shopping via Google Home, and Amazon reports that its Echo Dot home voice assistant was its best-selling item across its entire product catalogue during last November’s Black Friday sales, meaning voice-activated online purchasing will no doubt continue to grow.
Many retailers and brands are well aware of the important new purchase channel voice shopping provides to consumers. Not only does it position some of the largest companies’ goods in the top of the voice shopping search results when a customer makes a first-time purchase without specifying a brand, it offers unparalleled convenience to busy consumers, as it’s often even quicker than the super simple one-click payment method sweeping the payment sphere.
However, this new type of online shopping comes with its own set of payment security and fraud issues. Consumers have already voiced concern about the safety of shopping powered by artificial intelligence. 38% of the consumers surveyed by Walker Sands cited security concerns as their main apprehension of utilizing voice shopping capabilities (with privacy issues coming in at 33%). Meanwhile, one of the most frequently asked questions on Amazon’s Alexa website is “How secure is my transaction when I voice shop with Alexa?” The site’s answer is that Amazon secures all voice shopping transactions with the same protocols as when customers shop via PCs and mobile phones. The service also offers the ability to set up a four-digit passcode to help block unauthorized transactions.
Despite some consumer apprehension, e-commerce retailers are taking note of the voice shopping boom, especially considering the swarm of experts predicting that this technology will trigger wholesale disruptions across the retail industry and give major retailers a monopoly on e-commerce business. With Amazon leading the way in this incipient invention and reportedly moving consumers straight toward products that generate the highest margin for the company, some competitors are considering their own voice applications to help offer a convenient, personalized shopping experience across multiple channels. And fraud concerns are no doubt a topic of conversation.
As with any emerging technology, there’s always a risk that fraudsters can compromise the system and exploit vulnerabilities. For example, it has already been demonstrated that its possible for an attacker to take over a smart speaker if he or she is in range, and though both Google and Amazon have worked to fix such flaws, complete security in the world of technology is nearly impossible. Sadly, if a fraudster is able to take over a voice-activated account that stores passwords and credit card information, it’s extremely easy for him or her to make purchases in the trusted customer’s name (called account takeover fraud). That’s why it’s important that when businesses begin embracing voice activated shopping applications and technology, strong fraud prevention solutions are in place.
The voice shopping craze will no doubt begin to trickle over to companies outside of Amazon and Google, most likely in the form of individualized voice shopping applications. If a voice application is launched as a mobile application connected to an e-wallet, solutions such as RISK IDENT’s all-in-one fraud prevention solution FRIDA could prove invaluable when it comes to spotting complicated criminal activity like account takeover fraud. Sophisticated algorithms and ML solutions work to decipher extremely subtle differences between trusted customers and fraudsters, even when one-click (or may be the case, voice command) ordering is activated. And this helps give both consumers and companies peace of mind in the ever-changing futuristic shopping landscape.
For more information on how RISK IDENT helps tier-one businesses reduce payment fraud, contact us at email@example.com.