With physical stores shuttered, events canceled, and tourism at a standstill, COVID-19 has reshaped many aspects of day-to-day life. As result, consumers have been forced to shift their spending to online channels. Since March, when much of America began its lock down, e-commerce and other online behavior has shot upwards.

Accompanying this uptick in online traffic has been a rise in fraud. The rise in both legitimate and illegitimate online behavior has thrown the need for effective fraud prevention tools into stark relief. Companies need to allow transactions and login attempts from legitimate users while declining such behavior from criminal actors.

To learn more about the current trends in online behavior and fraud, PaymentsJournal sat down with Robert Capps, VP of Market Innovation at NuData, and Tim Sloane, VP of Payments Innovation at Mercator Advisory Group. During the conversation, Capps and Sloane broke down trends in online traffic and fraud attacks and then discussed how companies can respond to these threats.

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As online traffic has spiked, high-risk traffic has skyrocketed

Unsurprisingly, data from the past few months show a surge in online traffic. Between January and April of 2020, NuData witnessed a 17% increase in online traffic across all its clients’ industries compared to the first four months of 2019. The surge is “almost entirely attributable to the move of consumers online,” explained Capps.

When you drill into data from specific industries, the rise in traffic is even more pronounced. Retail traffic, for example, has increased by more than 57% from the previous year, noted Capps. Financial services have also seen a noticeable uptick in online traffic, with a 21% increase in consumer utilization of online financial services.

Increase in online traffic

Sloane and Capps agreed that these numbers reflect the fact that people aren’t just sheltering inside and ignoring normal financial or commercial needs. Instead, they have adapted to the new reality and have embraced online solutions. For example, with brick-and-mortar banking locations closed, many consumers have utilized online financial services to deal with incoming unemployment benefits and the stimulus checks related to COVID-19.

While an increase in online traffic is a positive thing for many companies, it does come with a downside. Capps explained that during this time period, there was a 43% increase in high-risk traffic compared to the previous year, showing that fraudsters are looking to capitalize on any...