Modernizing Identity Checks to Reduce Customer Friction and Combat Holiday Fraud Attempts

The holiday season reliably brings a surge in digital transactions, and with it a spike in fraud attempts. As retailers tackle their busiest buying period, there’s heightened pressure to make every customer interaction count by stopping fraud without triggering unnecessary friction or false declines.

With more than half of retailers reporting digital and e-commerce fraud over the past year, it’s become crucial to move beyond basic security checks and modernize fraud strategies. Retailers need stronger protections that can coexist with smooth customer experiences, especially during the holiday rush.

To keep transactions seamless, deliver better customer experiences, and encourage repeat customers, brands need to secure the buying journey from start to finish across both digital channels and the contact center. That could start by implementing stronger, smarter identity verification that provides agents with real-time mobile intelligence to verify phone numbers, spot fraud signals, and approve real, trusted customers faster.

The Limits of Traditional Customer Verification

Cybersecurity threats are evolving. More attackers are learning how to mimic legitimate customer behaviors and exploit gaps in retailers’ routine status checks. The question businesses need to ask themselves isn't just “Is this transaction safe?”, but also “What am I not seeing?” Hidden indicators like unusual phone activity or gaps in earlier checks can allow fraudsters to slip through. However, updating your strategy with data-driven signals can surface those risks in real time.

Relying on traditional verification methods puts retailers in a vulnerable position of missing fraud signals. At the same time, excessive identity checks can slow customer shopping, resulting in confusion and frustration. When consumers are confronted with too many steps throughout their buying journeys, like repeated one-time passwords (OTPs) and countless security questions, they might abandon their purchase or think twice about returning in the future.

Distinguishing Bad Actors From Loyal Shoppers

Brands that still rely on traditional verification methods are missing out on valuable mobile intelligence that can arm them with the data needed to spot potential fraud attempts. Fraudsters today are attacking security systems through SIM swaps, phishing schemes, and false identities. With more than half of all holiday e-commerce sales happening on mobile devices, retailers need to better verify customers without adding friction.

This is where silent, real-time authentication becomes a powerful tool. By embedding network-powered APIs directly into their applications, retailers can leverage advanced mobile intelligence. These APIs work quietly in the background, verifying a user’s identity by securely checking information from their mobile network operator. The process is invisible to the customer but highly effective at assessing the trustworthiness of a phone number or SIM card, stopping fraud that might otherwise go unnoticed.

This kind of intelligence also gives brands the ability to validate that a phone number is real and in service, so they’re not wasting outreach on fake or out-of-service numbers when margins are already stretched thin.

Mobile intelligence also allows agents and automated systems to analyze digital behavior and device patterns for each customer interaction and score its risk level. From there, low-risk purchases can quickly be approved, a step up in authentication can be triggered if something looks off, or the transaction can be declined before fraudulent activity can cause any damage. This allows the everyday shopper to move seamlessly through their buying journey, enriching their overall customer experience.

Fraud’s New Frontier

As fraud tactics grow increasingly sophisticated, brands must equip both digital applications and contact center teams with deeper intelligence to recognize and mitigate high-risk behavior. With e-commerce fraud expected to rise to $109 billion in 2029, retailers that layer deeper identity signals into their risk arsenal will be better positioned to safeguard revenue and reduce customer friction. A secure and seamless shopping experience is no longer optional; it's critical to success, especially during the peak holiday shopping season.

Fredrik Gessler is head of product management, Business Unit API, Vonage, a company that offers flexible and scalable voice, messaging, video and data capabilities across unified communications, contact centers and communications APIs.