Mitigating Fraud Risks in the Retail Payment Ecosystem: A CISO’s Perspective
The Convergence of Payment Systems and Fraud Risk: A CISO’s Perspective
Managing fraud risk across the retail payment ecosystem is a complex task, particularly in the convenience retail sector where payment systems span stores, corporate networks, and third-party payment processors. Paul Suarez, Vice President and Chief Information Security Officer (CISO) at Casey’s, a leading convenience retailer, shares his insights on how to mitigate fraud risk in this intricate environment.
Addressing the Challenges of Payment Infrastructure
To address this challenge, Casey’s employs a holistic approach, combining technical controls with business and operational controls to maintain a consistent security posture. This includes regular discussions with enterprise leaders on risk, lifecycle planning, and emerging threats specific to fuel payment infrastructure.
The Rise of New Payment Methods
The rise of QR-code based payment methods has also raised concerns about potential new fraud channels. Suarez acknowledges that any new payment method can attract new fraud tactics, but emphasizes the importance of protecting all payment channels with strong, consistent security protocols.
This includes monitoring for suspicious activity, strengthening authentication and validation processes, and educating teams on new threat patterns.
Loyalty Abuse
Loyalty abuse is another area of focus for Suarez’s team, as the rewards points held within customer accounts have real value and are an attractive target for fraudsters. The challenge lies in distinguishing between legitimate and fraudulent activity, particularly in a diverse customer base with varying transaction patterns.
To address this, Casey’s uses refined approaches to identify potential abuse, considering factors such as frequency and redemption patterns.
Monitoring Payment Systems
Monitoring payment systems across stores, corporate networks, and third-party payment rails requires a coordinated, cross-functional approach. Casey’s employs layered monitoring controls to provide real-time visibility into system health, transaction processing, and overall availability.
This enables teams to quickly identify and respond to issues. Business controls are also applied to reconcile transactional activity across the retail environment and external processors.
Third-Party Partners
In addition, Casey’s reviews the control environments of its third-party partners through Service Organization Control reports, ensuring a comprehensive understanding of controls across the full payment ecosystem.
This ubiquitous monitoring is critical, as payment systems are the lifeblood of convenience retailers.
Conclusion
By adopting a holistic approach to managing fraud risk, convenience retailers can protect their customers and maintain the trust and protection they expect. As new payment methods and technologies emerge, it is essential for CISOs to stay vigilant and adapt their controls to address emerging risks.
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