Understanding BNPL Fraud During Holiday Shopping

This document is a report that details the increasing prevalence of Buy Now, Pay Later (BNPL) fraud during the holiday shopping season. It outlines the significant financial impact of BNPL fraud on retailers, estimating losses between $3 to $5 billion annually, with total economic impacts potentially exceeding $10 billion. The report describes the evolution of BNPL fraud into a structured criminal enterprise, highlighting common attack methods such as stolen credential exploitation and synthetic identity creation. It explains how the holiday season exacerbates these risks due to increased transaction volumes and the attractiveness of high-value items. The document also presents practical defense strategies for retailers, including enhanced identity verification and collaboration with BNPL providers. Furthermore, it emphasizes the importance of preparation and technology readiness in combating fraud, suggesting that retailers must adapt to the permanent risks associated with BNPL adoption to protect their revenues and customer trust.