New research confirms that consumers are turning more and more to Buy Now, Pay Later (BNPL) as a way to finance online purchases. More than 74 percent of respondents in a new study from insurance provider Breeze indicated they have used BNPL at least once and 62 percent predict they will use it more in 2022.
While regulators are beginning to look into consumers’ reliance on BNPL as it relates to accumulating debt, less attention is being paid to fraud. As the popularity of the new payment method grows and more merchants partner with providers to meet increasing demand, fraud attacks leveraging BNPL are growing.
Because merchants are conducting the transaction and BNPL providers are collecting payments from consumers, merchants don’t always have full visibility into the data surrounding the consumer making the purchase. Making predictive risk decisions based on order behavior and customer details, therefore, becomes more challenging, so fraud prevention must be a collaborative effort between them, experts say.
Some merchants have identified patterns that have emerged as BNPL is being targeted by criminals in innovative ways.
