The Food Fraud Fight, With A Side Of AI - Kount

“There are two levers for moving men — interest and fear.” That’s an aphorism attributed to Napoleon Bonaparte, who knew a thing or two about fighting. Today there are more “levers” than in Bonaparte’s day, and wouldn’t you know it: interest and fear are still in the mix.

On the “interest” side of the equation is the restaurant sector and every business tied to it. They are solution-shopping like mad as they reopen and reinvent — simultaneously — in a fluid business climate where anything can happen. Doing their part for “fear” are the cybercrooks and “friendly” fraudsters, exploiting pandemic chaos for their own rotten reasons.

PYMNTS October edition of the Mobile Order-Ahead Tracker® done in collaboration with Kount notes that, “Quick-service restaurants (QSRs) are catching on that their operations could benefit by harnessing data analytics and artificial intelligence (AI). These technologies are becoming more critical to helping restaurants capture customer information, which can expand their sales across multiple channels as well as equip them with valuable fraud-fighting insights.”

“Consumers appear to support these efforts, too, with a recent report revealing that 71 percent favor having QSRs and fast casual restaurants integrate AI into their business operations.”

There’s Nothing ‘Friendly’ About Fraud

If consumers are asking “where is it” — that often means it’s too late. Which is why speeding up digital transformation is imperative now, and nowhere more than in the restaurant sector.

Consumers making app-based orders respond to convenience, personalization and speed. Restaurants have been relying heavily on apps and aggregators, but that’s exposing customers and companies to new levels of real-time risk that are best managed with digital exactitude.

“With digital transformation, payments are going card-not-present, whether it be an online order for delivery, mobile order-ahead or even ordering from within the restaurant via a phone app or other method. That shift to card-not-present also shifts the liability,” Scott Adams, vice president of friendly fraud at Kount, told PYMNTS. “Chargebacks are a risk because fraudsters like to test stolen card information with businesses that may be accustomed to multiple small transactions in a row and that also don’t have time for a manual review process.”

Adams added, “AI-driven fraud prevention built on a global data network can protect against criminal fraud, but friendly fraud is also an issue that may be new to QSRs. Friendly fraud occurs when legitimate customers dispute transactions. As QSRs shift from brick-and-mortar sales to digital sales, preventing chargebacks and disputes in real time, as they happen, is critical.”

Along those lines, Kount recently partnered with Verifi, a Visa Solution, to help businesses prevent chargebacks both before the transaction ever goes through and after, as soon as a dispute begins, he said.

Safety In All Things, Including Payments

There’s yummy news wrapped in the burrito bowl someone just left at your door, and it’s this: “Restaurant revenues have grown by 82 percent over the last four months in the U.S., according to the National Restaurant Association,” according to the new Tracker. “Restaurant tabs totaled just $30 billion in March — less than half the amount customers spent in January — when shutdowns were ordered to prevent the virus from spreading. Sales have risen in the months since, however, as eateries reopened with limited seating.”

A nation hungry for the experiential aspects of delicious restaurant food are grateful and glad, but much of this delicate recovery rests on restaurants’ ability to keep things safe all around.

In the restaurant game, “safety” means a lot of things now. Payments safety is paramount after health safety, and it is artificial intelligence (AI) operators are turning to for that.

“Many QSRs are incorporating or planning to incorporate AI into their operations to appeal to customers who are growing fonder of the technology. One recent report found that 71 percent of consumers would be amenable to QSRs’ and fast casual restaurants’ efforts to integrate AI into their business operations, for example,” the Tracker states. “Restaurants are beginning to tap these tools for better customer service and predictive analytics, which can provide them with insights into customer behaviors and act on them by tailoring their product offers. Such efforts can even be channel- or location-dependent, too, with many restaurants utilizing tactics like geo-targeting to send personalized or special offers to customers via mobile app.”

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