Ecommpay, the inclusive global payments platform, has published the first part of a new report titled ‘Beyond the Black Box: Why human-centric fraud demands ecosystem-wide transformation’.
The report brings together insights from various fraud, compliance, and regulation experts to examine fraud through the lens of systemic human vulnerability and the current misplacement of resources, regulation, and tools. Ultimately, it aims to support businesses that rely on the successful operation of e-commerce, including merchants and FinTechs active within the space.
Three uncomfortable truths
Through interviews with industry experts, the Ecommpay report identified three “(very) uncomfortable truths” regarding the current state of e-commerce fraud protection:
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Current fraud prevention creates competitive disadvantage and market distortion.
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Fraud prevention technology and regulation are not built to address the human vulnerabilities that have now become the primary attack vector.
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Regulatory frameworks contain inherent conflicts that cannot be resolved at the institutional level.
The report explicitly highlights that while fraudulent attacks have shifted away from technical exploitation and toward human manipulation, the industry and regulatory response frameworks remain heavily anchored in technical and institutional solutions.
The need for ecosystem-wide change
Willem Wellinghoff, chief compliance officer and UK chair of Ecommpay, emphasized the escalating nature of the threat.
“Fraud is an increasing threat, with the number of cases and the financial losses growing year-on-year,” Wellinghoff stated. “The challenge is that the methods criminals employ to defraud consumers and businesses continue to evolve, and regulation and technology struggle to maintain pace or get ahead. More needs to be done to bring about real, meaningful change.”
Ecommpay hopes the findings will stir merchants and FinTechs into action, urging them to join forces with competitors, industry bodies, regulators, and the government to bring about the change the ecosystem desperately needs.
Actionable steps for merchants
While broad, global change will require significant collaboration, Wellinghoff noted that there are steps e-commerce merchants can take immediately.
“Discussing fraud prevention with payment providers and taking a detailed look at internal systems is the best place to start, to quickly identify weaknesses and opportunities for improvements,” Wellinghoff explained.
The report outlines seven key fraud protection steps for e-commerce merchants:
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Discuss fraud prevention with your payment provider.
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Audit your own systems.
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Educate your customers on the risk of fraud so they can protect themselves.
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Train staff to recognise attempted fraud.
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Stay up to date with the changing fraud landscape.
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Monitor for unauthorised use of your brand and report fraudulent websites.
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Report suspected fraudulent transactions directly to your payment service providers (PSPs).
Wellinghoff added that effective fraud prevention is not a “one-off tick-box exercise”. It requires ongoing monitoring, deep knowledge of the rapidly evolving landscape, and the continual development of internal solutions and processes to meet changing demands.
Founded in 2012 and headquartered in London, Ecommpay offers global and local acquiring and comprehensive payment processing, utilizing in-house fraud detection solutions to help merchants protect themselves and their customers.