With the Covid-19 pandemic causing national lockdowns and government calls for social distancing, businesses, particularly those in the retail and food and beverage spaces, are revaluating how they engage with their customer base. For many, the answer has been the adaptation or creation of digital platforms that make it easier for consumers to reach out to companies online.

Online transaction volumes in most retail sectors have seen a 74% increase in March 2020 compared with the same period last year, according to data from payments company ACI Worldwide.  

“During these unprecedented and uncertain times with millions now at home, many consumers are going online to purchase products or services,” observes Debbie Guerra, executive vice president at ACI Worldwide. “Quarantine has changed lives for all of us, with consumers buying electronics and furniture – to support work, communication, school and entertainment – as well as items such as home goods and DIY products.”

The trend is similar to what happened in China during the early 2000s when the severe acute respiratory syndrome (SARS) epidemic propelled the businesses of Chinese e-commerce giants Alibaba and JD.com, solidifying the online channels as viable business options in the country for years to come.

While the increase in online transactions is a welcoming sign for some businesses, it has also increased the risk of fraudulent transactions. ACI Worldwide research points out that fraudsters under the Covid-19 environment are using the online surge to target both consumers and merchants.

To counter the risk of fraudulent activities, businesses looking to bolster their e-commerce capabilities should first strive to gain better visibility and control over their financial activities. They could start by reducing the amount of dormant accounts they have or by aiming to have a multi-bank viewing solution whereby treasurers or chief financial officers can see their real-time cash position through a single portal. This could be helpful in managing friendly fraud or chargebacks where real-time monitoring is key to determining whether customer claims are valid or not.

Reconsolidation in the form of virtual accounts may be useful for these e-commerce entrants as it adds clarity around where flows are coming from and determines whether delivery obligations have been fulfilled. In addition to reducing the possibility of fraud or obscure transactions, reconsolidation supports the overall customer experience by ensuring that legitimate transactions are processed in a timely manner.