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Boost BNPL Business Growth: Mitigate Fraud & Increase Lending with a Privacy-First Biometric Identity Authentication

Fraud attacks on BNPL platforms skyrocketed by 54% YoY. Account Takeover, Synthetic Identity Fraud, and SIM swap scams are on the rise, affecting providers and customers alike.

Boost BNPL Business Growth: Mitigate Fraud & Increase Lending with a Privacy-First Biometric Identity Authentication

Fraud attacks on BNPL platforms skyrocketed by 54% YoY. Account Takeover, Synthetic Identity Fraud, and SIM swap scams are on the rise, affecting providers and customers alike.
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The Problem

The soaring popularity of Buy Now, Pay Later (BNPL) platforms has attracted not only eager customers but also opportunistic fraudsters. Buy Now, Pay Later is so popular with consumers that its overall market valuation is expected to reach $3.98 trillion by 2030.  

Amidst the growth of the Buy Now, Pay Later (BNPL), fraud risk in new account opening and login processes emerges as a crucial challenge. Such fraud not only jeopardizes the financial stability of BNPL firms and consumers but also curtails their growth by constraining their credit extension capabilities.

Common BNPL Fraud Types Affecting BNPL Businesses

  • Account Take Over (ATO) Fraud: Malicious actors gain unauthorized access to a user's BNPL account, committing fraud on accepting merchants. Inflicts financial losses, damages reputation, misuses credit lines, increases unpaid debts, erodes trust, stifles growth, and may go unnoticed by consumers for weeks due to delayed payments
  • Synthetic Identity Fraud: Fraudsters exploit stolen information, creating fictitious identities for BNPL transactions. Establish credit lines with fake identities, leading to significant financial losses from unpaid debts. Undetected for extended periods undermines credibility, erodes trust, and hinders business growth.
  • Sim Card Swapping: Fraudsters deceive cellular providers to control the target's phone number, bypassing security measures and leaving BNPL accounts vulnerable to unauthorized access, fraudulent activity, credit risk, and unpaid debt.
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The Urgent Need for BNPL Fraud Mitigation Solutions

Considering the escalating prevalence of these fraudulent activities, it is reasonable to anticipate a corresponding increase in bust-out events and associated credit losses. Therefore, fraud prevention is paramount for BNPL platforms, as the consequences of failing to address these risks are severe.  So, what are the viable solutions? In the ensuing sections, we will explore the range of available strategies.

The Solution

Trust Stamp offers state-of-the-art digital identity technologies to protect BNPL businesses and customers from identity fraud risks. Our Biometric Multi-Factor Authentication (MFA) and Greylisting with Duplicate Identity Detection effectively mitigate Account Takeover Fraud, Synthetic Identity Fraud, and SIM Swap Attacks.
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Biometric MFA

Trust Stamp's Biometric MFA goes beyond traditional authentication methods by binding an identity to a unique biometric, like a facial match with liveness detection. This extra layer of security ensures that only legitimate customers can access BNPL platforms, effectively mitigating data breaches and unauthorized account access.

Greylisting with Duplicate Identity Detection

To combat Synthetic Identity Fraud, Trust Stamp's Greylisting approach designates questionable identities as 'greylisted,' closely monitoring their activities without storing sensitive information. This proactive stance helps identify and disrupt patterns consistent with synthetic identity fraud, protecting BNPL providers from financial losses.

Get in touch with Trust Stamp

Take a proactive step to secure your BNPL business with advanced and trusted identity solutions today!
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