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ECOMMERCE AND FRAUD IS SET RISE IN THE SINGLE DIGITAL ECONOMY

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ECOMMERCE AND FRAUD IS SET RISE IN THE SINGLE DIGITAL ECONOMY

The European Commission (EC) recently revealed plans for regulatory reform that aim to increase EU member states’ economies by £308bn a year by stimulating cross-border ecommerce. Monica Eaton-Cardone, CIO and co-founder of chargeback fraud recovery company Global Risk Technologies, highlights the potential impact of these changes and the increased exposure to fraud and chargeback risk that merchants must prepare for by the end of 2016.

The EC has announced 16 proposals, which it aims to implement in the next 18 months, to try to eliminate barriers to online trade across Europe. From more affordable parcel delivery, to ending location-limited services, the proposals will encourage more accessible cross-border ecommerce. Current figures show that only 15% of people shop online from another EU country, which the EC plans to change with reformed regulations in a bid to move from 28 national markets into a more streamlined single digital economy called the ‘Digital Single Market’.

The proposals are good news for digital retailers in the European Union and will promote a more positive environment for ecommerce trade on the continent.

Not only will the ecommerce market across Europe benefit from an increase in trade volume, but the new proposals could also promote increased online spending. In the UK alone, online retail sales are predicted to reach £53.25bn in 2015 as ecommerce continues to boom. Unfortunately, as the opportunities and money within the market grow, so too does the attractiveness for fraudsters.

More customers bringing more spending power means a new wave of fraud and chargeback threats for merchants.

Monica Eaton-Cardone

Monica Eaton-Cardone

Chargeback Fraud (also known as “Friendly fraud”) remains a growing problem in ecommerce, with a growth rate of 41% over the last two years in Europe alone. Without equal attention on chargeback standards, forward-thinking initiatives aimed at promoting increased transactional growth may backfire in Europe due to imbalanced regulations surrounding this type of crime.

As more consumers are encouraged online in an effort to bolster ecommerce success, they will increasingly expose this current loophole, fraudulently claiming chargebacks on valid credit card transactions while merchants are burdened with rising liabilities and costs.  The end result is higher prices, reduced values, and the accidental creation of a new age of ‘Consumer Entitlement’.

The worry for merchants is that they often do not know about the problem until they receive a forced refund from their bank (i.e., a chargeback). In fact, 58% of cardholders do not contact the merchant at all – instead they file the dispute directly with the bank – and a staggering 86% of chargeback claims are actually fraudulently placed. If this trend continues then any gains merchants make as a result of the EC changes will be severely offset by financial and reputational damage from rising chargebacks.

To combat the risk of chargebacks, there are several steps that merchants can take to educate and protect themselves against the risks.

One of the main changes merchants can implement is to employ best practice processes such as maintaining delivery receipts and enhancing their customer service levels and contact options.

Due to the sweeping growth of ecommerce activity, most merchants remain unequipped to defend themselves against a fraud backlash.  A reported 20% of UK small businesses have a risk management plan butfraud is risk and risk should be managed effectively. Failure to do so is carte blanche to fraudsters. Security must be balanced with customer experience and with the predicted growth in online spending, the relevancy of this equation is more important than ever.

The ecommerce industry is continuing to see dramatic expansion as consumers get better access to more convenient digital and online shopping stores.

Merchants and banks are becoming increasingly exposed to the threat of chargebacks imposed from online transactions – they must ensure that they know what threats they’re facing online and put the right tools in place to protect themselves now and in the future.

If the proposals from the European Commission can be implemented successfully in time for the ambitious end of 2016 deadline, then ecommerce across Europe will enjoy a significant boost in transactions. However, it’s important that merchants realise that the proposals are not a golden ticket to new riches. By increasing the attractiveness of the online European market to internet businesses, the changes also increase the attractiveness for would-be fraudsters. Addressing this threat now and planning ahead with effective processes for the future will ensure that the prepared European business is the successful European business.

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Sunak to raise business tax to pay for COVID-19 support – The Sunday Times

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Sunak to raise business tax to pay for COVID-19 support - The Sunday Times 1

(Reuters) – British finance minister Rishi Sunak is set to increase a tax on business to pay for an extension to COVID-19 support schemes in the budget next month, The Sunday Times reported https://bit.ly/3ujaBcU.

Sunak, in his speech on March 3, will announce he is increasing corporation tax from 19 pence in the pound and will outline a pathway where it rises to 23 pence in the pound by the time of the next general election, the report said. The move will raise an expected 12 billion pounds ($16.8 billion) a year, the report added.

According to the report, at least 1 pence is set to be added to the bill for business from this autumn, at a cost to business of 3 billion pounds, with further rises in subsequent years.

Allies of Sunak clarified he would not increase corporation tax higher than 23%.

These measures will be helpful in paying for an extension to the furlough scheme, VAT cuts and business support loans until at least August.

Unlike the 2010 Conservative-led government, which pursued spending cuts to rebalance the economy after the global financial crisis, Sunak is expected to defer most of the toughest decisions about how to pay for that support in his budget speech.

“The corporation tax hike will be higher than expected and the extension of the support schemes will be longer than most people expect,” the newspaper quoted a source as saying.

Insiders indicated the stamp duty holiday on property purchases would also be extended in line with the other coronavirus support measures, the report said.

Britain’s economy had its biggest slump in 300 years in 2020, when it contracted by 10%, and will shrink by 4% in the first three months of 2021, the Bank of England predicts.

($1 = 0.7136 pounds)

 

(Reporting by Vishal Vivek in Bengaluru; Editing by Lincoln Feast.)

 

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Foxconn chairman says expects “limited impact” from chip shortage on clients

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Foxconn chairman says expects "limited impact" from chip shortage on clients 2

TAIPEI (Reuters) – The chairman of Apple Inc supplier Foxconn said on Saturday he expects his company and its clients will face only “limited impact” from a chip shortage that has rattled the global automotive and semiconductor industries.

“Since most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-way, chairman of the manufacturing conglomerate formally known as Hon Hai Precision Industry Co Ltd

“Therefore, the impact on these large customers is there, but limited,” he told reporters.

Liu said he expected the company to do well in the first half of 2021, “especially as the pandemic is easing and demand is still being sustained.”

The global spread of COVID-19 has increased demand for laptops, gaming consoles, and other electronics. This caused chip manufacturers to reallocate capacity away from the automotive sector, which was expecting a steep downturn.

Now, car manufacturers such as Volkswagen AG, General Motors Co and Ford Motor Co have cut output as chip capacity has shrunk.

Counterpoint Research says the shortage has extended to the smartphone sector, with application processors, display driver chips, and power management chips all facing a crunch.

However, the research firm predicts Apple will face a minimal impact, due to its large size and its suppliers’ tendency to prioritise it. Apple is Foxconn’s largest customer.

Foxconn is looking at other areas for growth, including in electric vehicles (EVs), and Liu said their EV development platform MIH now had 736 partner companies participating.

He expected it would have two or three models to show by the fourth quarter, though did not expect EVs to make an obvious contribution to company earnings until 2023.

Liu also said the company was still looking for semiconductor fab purchase opportunities in Southeast Asia after not winning a bid to take over a stake in Malaysia-based 8-inch foundry house Silterra.

(Reporting by Ben Blanchard and Jeanny Kao; Writing by Josh Horwitz; Editing by William Mallard and Ana Nicolaci da Costa)

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EU seeks alliance with U.S. on climate change, tech rules

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EU seeks alliance with U.S. on climate change, tech rules 3

By Sabine Siebold and Kate Abnett

BERLIN (Reuters) – Europe and the United States should join forces in the fight against climate change and agree on a new framework for the digital market, limiting the power of big tech companies, European Union chief executive Ursula von der Leyen said.

“I am sure: A shared transatlantic commitment to a net-zero emissions pathway by 2050 would make climate neutrality a new global benchmark,” the president of the European Commission said in a speech at the virtual Munich Security Conference on Friday.

“Together, we could create a digital economy rulebook that is valid worldwide: a set of rules based on our values, human rights and pluralism, inclusion and the protection of privacy.”

The EU has pledged to cut its net greenhouse gas emissions to zero by 2050, while President Joe Biden has committed the United States to become a “net zero economy” by 2050.

Scientists say the world must reach net zero emissions by 2050 to limit global temperature increases to 1.5 degrees above pre-industrial times and avert the most catastrophic impacts of climate change.

The hope is that a transatlantic alliance could help persuade large emitters who have yet to commit to this timeline – including China, which is aiming for carbon neutrality by 2060, and India.

“The United States is our natural partner for global leadership on climate change,” von der Leyen said.

She called the Jan. 6 storming of the U.S. Capitol a turning point for the discussion on the impact social media has on democracies.

“Of course, imposing democratic limits on the uncontrolled power of big tech companies alone will not stop political violence,” von der Leyen said. “But it is an important step.”

She was referring to a draft set of rules unveiled in December which aims to rein in tech companies that control troves of data and online platforms relied on by thousands of companies and millions of Europeans for work and social interactions.

They show the European Commission’s frustration with its antitrust cases against the tech giants, notably Alphabet Inc’s Google, which critics say have not addressed the problem.

But they also risk inflaming tensions with Washington, already irked by Brussels’ attempts to tax U.S. tech firms more.

Von der Leyen said Facebook’s decision on a news blackout on Thursday in response to a forthcoming Australian law requiring it and Google to share revenue from news underscored the importance of a global approach to dealing with tech giants.

(Additional reporting by Foo Yun Chee; editing by Robin Emmott and Nick Macfie; editing by Jonathan Oatis)

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