As with any transaction, doing business online comes with risks.
With a brick and mortar shop, you wouldn’t just leave the front door open after closing, leaving it vulnerable to theft and vandalism. So, why leave your company unguarded on the digital side?
Did you know that during PwC’s Global Economic Crime and Fraud Survey 2022, about 46 percent of organizations surveyed reported experiencing fraud, corruption or other economic crimes in the last 24 months?
Preventing online payment fraud is a difficult challenge. Thankfully, brands are aware that protecting their customers from external attacks should be first and foremost on their minds.
And instead of being reactionary, many are choosing the proactive route as a way of gaining a competitive edge against other players in the industry.
Fraud Prevention for Online Payments as a Competitive Advantage
Online fraud protection is no longer a buzzword thrown about by brands claiming hassle-free transactions.
Companies now know the value of offering this service as a “must have.” And if they want to be viewed as a trusted brand, it goes part in parcel with the product.
The key is understanding what you’re up against. It comes down to data — a crucial component to building a strategy to tackle online fraud and prevent it from happening again.
Before the start of the pandemic, e-commerce sales worldwide had seen gradual growth. With the onset of COVID-19, the numbers grew at an exponential rate.
Unfortunately, with more online transactions came more fraudulent activities.
Global payment fraud will cost merchants $40.62 billion in losses by 2027, according to the latest figures.
Let’s look at what this means for a single brand — this equates to over 350 percent of Apple’s reported net income in the 2021 fiscal year.
A recent survey also found that daily attacks on retail websites spiked to more than 75,000 by the 15th and 30th of every month.
Online payment fraud losses include the sales of digital goods, physical goods, money transfer transactions and banking.
Attacks can include phishing, business email compromise and social engineering fraud.
The question is, do you want your company to end up as another statistic when it comes to theft and online transaction fraud?
In this article, we’ll unpack why companies and industries need to strengthen their defenses, look at successful case studies and fraud prevention techniques.
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Why is Fraud Prevention Important?
Benjamin Franklin once said, “An investment in knowledge pays the best interest.”
It’s imperative that you arm yourself with the knowledge and understanding of the importance of fraud prevention. But first, we need to look at the definition.
In a nutshell, fraud prevention is a strategy implemented to detect fraudulent online purchases or banking transactions and prevent these actions from causing not only financial, but reputational damage to the customer and financial institution.
But there are other aspects to online fraud prevention as well. Most companies are well aware of the Dark Web. However, its influence spreads far beyond Hollywood cybercrime movies and pop culture.
Fraudsters are currently exchanging your information on the Dark Web after obtaining it and monetizing it by using sophisticated malware techniques.
This doesn’t mean that you can’t take measures to protect your business. Thanks to sophisticated fraud prevention technology, you can ensure your company’s online security is one step ahead.
The key is to be aware of online transaction fraud and how to prevent it.
Who Needs to Use Fraud Prevention?
E-commerce Industry
The e-commerce sector has grown in leaps and bounds over the past few years, thanks to the proliferation of innovative advances such as digital wallets and AI. The customer experience was also improved thanks to CRM integration.
So, it comes as no surprise that the total cost of e-commerce fraud to merchants is likely to exceed $48 billion globally in 2023.
Fraud prevention is tantamount to stem the massive losses from online transaction fraud in e-commerce and B2B sales.
Banking and Financial Institutions
Financial crime is probably one of the biggest headaches for the banking and finance industry.
The evolution of digital payments, as well as real time payments, has created a myriad of challenges, requiring banks to keep up with the growing online threats that could see them lose billions every year.
And it’s not just account hacking. Fraudsters have adopted sophisticated ways of flying under the radar.
For example, social engineering scams target impressionable account holders, while data security breaches are easy pickings for low-hanging fruit, especially when using public Wi-Fi.
It’s for these reasons that fraud management solutions need to be put in place before fraudulent actions take place.
Cryptocurrency
The fast-growing cryptocurrency sector may have reached a tipping point.
The same regulations that govern the banking sector do not apply here. For those who don’t understand how the system operates, transparency and trust are big issues.
And because this type of currency has been negatively associated with cybercrime, its biggest selling point — anonymity — is now working against it.
According to the Federal Trade Commission, 46,000 people lost more than $1 billion to crypto scams between Q1 2021 and Q1 2022, and currently, crypto scams account for 40 percent of all dollars reported lost to fraud on social media, Thomson Reuters reported.
Hospitality sector
Many people who book via online travel platforms have found themselves victims of credit card fraud and identity theft.
Hotel and airline loyalty programs have also been used as pawns in enterprise fraud.
These programs have evolved to offer liquid assets such as gift cards, airline tickets and travel packages. It was only a matter of time before fraudsters found a way to exploit the lack of security and protection by taking over accounts, Deloitte reported.
Airline ticketing fraud scams are also on the increase. Airlines Reporting Corporation’s manager of fraud investigations, Doug Nass, told Travel Weekly that the airline ticketing fraud schemes resurfaced after remaining dormant since 2014.
It also comes as no surprise that the travel and hospitality fraud sector is fuelled by data breaches. Since January 2021, over 4.4 million leaked credentials related to airlines, travel and hospitality organizations were reported to cybersecurity companies.
Common Online Payment Schemes
Personal Fraud
In most cases, people feel ashamed of being tricked and many incidents of personal fraud go unreported.
Unscrupulous criminals target the desperate and lonely, using psychological tactics to bait their victims.
We all know the cautionary tale from the hit Netflix docuseries Tinder Swindler, and the term “it will never happen to me” was on everyone’s lips. But are you sure it could never happen to you?
Social engineering scams is a broad term that refers to exploiting someone’s trust in order to swindle them out of money, and is especially rife on social media.
According to Interpol, this scam is used to target a wide audience in order to gain as many victims as possible.
This can happen in many ways, including phishing, telecom fraud, romance scams and sextortion.
When publishing its 2019 phishing and counterfeiting report, Forbes identified more than 4.2 million fraud websites.
Unfortunately, these fake sites are notoriously difficult to take down, and the longer they stay up, the more damage they do to brand authority and business-customer relationships.
The most common fraudulent schemes targeting online users are fake online stores and fraudulent giveaways and sweepstakes, fake streaming services and phishing-related banking and payment sites.
Fraud Prevention Techniques
Machine Learning
Machine learning (ML) has become one of the most advanced technologies used across different industries.
Because of its innovative characteristics, ML can be a viable tool for detecting and preventing fraudulent activity such as blackmailing and breaching servers in search for valuable data.
A subset of data science, ML is programmed to learn and improve from experience, which means the technology will be improving systematically.
So how does it work? ML detects fraudulent activities and based on the information it receives, provides an instant response to any suspicious actions. The result is that your company receives valuable insights for fighting future cases of such activities.
Intrusion Detection System
Cybersecurity issues in the hospitality industry will cost this sector approximately $6 trillion per year on average after 2021, a study published by ResearchGate found.
Cyber attackers use hacking methods to obtain data like clients’ personal information and sensitive business information.
Intrusion detection technology analyzes all activity on the internal network or any other system to detect suspicious activity, intrusions and attacks.
Intrusion detection systems detect internal attacks and authorized attacks.
Secure Payment Gateway
Yes, you’re selling a quality product, but how secure is your payment gateway?
When clicking “proceed to payment,” customers want convenience and security. If your company can’t deliver either, chances are they’ll buy the same product from a competitor.
According to the latest figures, 11 percent of online users abandon their order when the checkout system is complex, 12 percent if they need to enter too much personal information, 7 percent if there are too few payment methods and another 14 percent if there is no guest payment option on the site.
The technology that a secure payment gateway provides is peace of mind for your customer, who will readily visit your e-commerce website again for another purchase.
The premise is simple enough. The secure payment gateway acts as an interface between the supplier website and its customer.
Another very important function is the encryption of confidential data, like the client's credit card information.
Using Fraud Prevention to Gain a Competitive Advantage
Transformation is inevitable. No one knows this better than brands competing in the online space.
If you want to stand out, offering your customer a seamless, secure experience will convert to sales. And that’s the end game — making money.
But to make money, you have to invest in reliable systems to ensure you’re not vulnerable to internal or external attacks.
Once you realize the importance of online fraud prevention and implement the technology, you’re already two steps ahead of your competitors.
And don’t forget, it saves you time, money and valuable resources.
Consider Intellectsoft Your Trusted Partner
With more than 15 years of experience, Intellectsoft is a digital transformation consultancy and technology provider that prioritizes establishing an end-to-end partnership approach with its customers - that range from growing startups to multinational corporations.
Intellectsoft’s mission is to transition brands into a new digital era with the help of new technologies and impactful software solutions.
But don’t just take our word for it. Our impressive portfolio of clients includes Fortune 500 companies, including Jaguar, Walt Disney, Audi and Universal.
Intellectsoft created an iPad app for Harley-Davidson’s exhibition staff, helping brand reps visually showcase product customizations through a “user mentor” feature that works in more than 15 languages.
With the app, brand reps could seamlessly sign prospective clients up newsletters and test rides, while the integration of SSL ensured safe handling of all data.
Why choose Intellectsoft?
From consumer-oriented apps or to transformative enterprise-class solutions, Intellectsoft is a trusted authority in the digitization process.
Conclusion
Now that you have the facts and know the risks of not using online fraud prevention technology for your company, there’s no question of why. Rather, ask yourself when?
FAQ
What is online payment fraud?
Online payment fraud is any type of illegal transaction done by a cybercriminal, resulting in a loss of revenue.
How do I avoid online payment fraud?
Always keep abreast of the latest fraud trends and partner with a verified digital consultancy such as Intellectsoft.
Who needs to use fraud prevention?
E-commerce, mining, hospitality, healthcare, banking and financial institutions are just a few of the industries susceptible to online fraud. Based on our case studies, Intellectsoft has experienced varying degrees of success with clients because we offer a tailor-made service.
What type of technology is used for online fraud prevention?
Intellectsoft uses machine learning, which detects fraudulent activities and based on the information it receives, provides an instant response to any suspicious actions. Our areas of expertise also include digital wallets, AI and robotic process automation (RPA).
How do I use online fraud prevention as a competitive advantage?
A proactive business owner will know that data is king when it comes to fraud prevention and chargebacks.
By adopting a strategy based on the data received, a savvy merchant is at an advantage. Remember, the right fraud prevention strategy will reduce chargeback disputes, save money and improve customers’ experience and trust.
The hospitality industry depends a lot on keeping customers happy, but it’s
getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher
than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win
customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and
increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that
getting their attention is a real challenge. It’s not easy to make them choose your business over others. What
worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But
with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy,
expectations have changed. The good news is these businesses have shown what works: great customer
service. They focus on personalizing the experience, making things easy for customers, offering loyalty
programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how
they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction
in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the
backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers
are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a
study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase
in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a
company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality
industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the
hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer
service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s
biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor
Customer Service
Even with strong and high-quality business offerings, poor customer service can
drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we
live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with
technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39%
upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some
still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage
their data and create new systems or add features.
Some of the recent examples include clients coming to us to
create AI solutions for their services
while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company
objective, and working on keeping the data clean (centralized, structured, and segmented).
When
we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI
and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing,
centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so
we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start
with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for
gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide
you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and
travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and
retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers
place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff
not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team,
helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine
having an app dedicated to making your team’s work easier and more efficient!
How Technology
Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar
technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation
and working hand in hand with technology to achieve the highest standards and establish brand-new “golden
standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports
customer service.
Examples of Intellectsoft projects
Property management systems
(PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers
extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with
managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The
platform also includes features for equipment management, key instructions, workflows, and custom permissions. This
makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus,
tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged
community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed
marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining,
make reservations, and interact with staff— through a simple tablet in their room. The solution includes three
parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and
a backend system that connects everything together. This approach makes things easier for guests and staff,
improving both convenience and efficiency.
Existing Customers First: Building Loyalty with
Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that
retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs
five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the
number one revenue driver for the company.
Moreover, a 5% increase in customer retention can
lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a
business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster
long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business
model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s
part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With
the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t
forget.
More than half of hotel chains are already using personalization features on their websites, booking
platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest
preferences perfectly.
Source: Deloitte
How does
technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special
requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping
them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to
local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls
adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every
customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our
clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to
control services, explore amenities, and find resort information-- with a special touch to their suite type. For the
client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing
issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty
program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive
benefits.
Our solutions not only helped the client with special experiences for guests; it also improved
operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We
transitioned away from ESB (Enterprise Service
Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions.
Similarly, we’ve implemented Device Farms that improved operations
and saved resources."
Leveraging Software to
Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and
introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to
introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by
analyzing your database in detail.
Upselling via Apps
Boosting revenue in the
hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your
app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner
reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations
during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience.
And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their
previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource
Management Software
Making every resource count in your hospitality business is key. Inventory and
resource management software allows you to effortlessly track everything from linens to room availability, ensuring
nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations
assists sustainably keep everything under control and know what you need to focus more. It helps maximize room
occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This
approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how
technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service
Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the
right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest
experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by
identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track
customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best
solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look
for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM
software, live chat tools, or a guest experience app can make a difference.
3. Equip Your
Team
Technology is only as effective as the people using it. Train your staff to make the most of the
new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff
creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well
the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you
fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality
Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility
bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer
satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our
experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and
experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building
strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points
and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and
continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software
development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and
systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the
hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer
experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention
strategy with personalized technology? Contact our experts, and
we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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