Fraud prevention in online retail

Fraud prevention Fraud prevention in online retail

Published 15.09.2021 by Daniel Gamma, Director Corporate Sales CRIF AG

Attempted fraud is on the rise in online retail. But online retailers are not defenceless.

The coronavirus crisis has given online retail a real boost. The sector is calling 2020 its 3-year leap forward (in German). At the same time, cyber crime and online retail fraud have increased. In Switzerland alone, over 2 million email addresses (in German) have been stolen. Typical types of fraud in online retail are identity theft and account takeovers.

Despite the shift from cash to card and mobile payments in bricks-and-mortar retail, payment by invoice is experiencing a boom and is also becoming increasingly popular internationally.

From the retailer’s perspective, payment by invoice is an insecure method of payment, as they must bear the risk of payment defaults unless they pass on responsibility for the customer and the data to an external service provider. In the past, the only precaution taken by shop operators to protect themselves from payment defaults was to perform an address verification and credit check before the end customer selected the payment method. Today, this is no longer sufficient, as scammers can pretend to be someone else or even take over real customer accounts. Fraud prevention checks have also been carried out for a number of years. Various options exist. For example, association lists as provided by (in German) for use in the verification process. Or online retailers can work together with service providers who put together customized fraud filters. This could be data from suspicious transactions or actual cases of fraud.

One of the most efficient fraud prevention measures is still stipulating that billing address and delivery address are the same. However, the market situation is leading more and more online shops to accept different billing and delivery addresses. Here, too, there are service providers who offer a delivery address check as part of the risk assessment.

Credit agencies that are heavily represented in the buy-now-pay-later sector can use their data to provide additional fraud-prevention products. For example, a verification score. This is based on provider data and external sources, such as Swiss Post, and defines how well and for how long you have known the person in question.

We are now seeing widespread use of person-independent device fingerprint solutions where the device used is checked. Devices that have already been used for attempted fraud must be exposed. A check is also performed to determine how often a device was launched in the same online shop and on the same day, etc.
A “transaction tool” can also be used to combat attempted fraud with software that checks multiple data parameters of every transaction for patterns indicating fraud. Shop operators are also increasingly using the option of outsourcing fraud prevention to specialists (in German).

With these tools, online retailers are well placed to continue offering the most popular payment method in Switzerland (invoice payment) at a calculable risk while also protecting themselves from fraud.


Due to the current situation, Connecta Bern will again be held as a digital event in 2021. Connecta is renowned for shining a light on the diverse nature of digitization and this year will be no different with content presented across the three formats of Connecta Blog, Connecta TV and Connecta Talk. Find out more here:


Daniel Gamma, Director Corporate Sales CRIF AG

20 years of experience in the digital commerce environment. 13 years in a leading role in the DACH region, including 6 years as Global Director of E-Commerce at CRIF. Consulting on risk and address management as well as the payment process. Numerous publications on the topics of risk management, payment control, creditworthiness checks and fraud prevention.

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