What two types of fraud should a marketplace owner be particularly cautious of?

A marketplace owner should be particularly cautious of Merchant and Account Takeover fraud due to the distinct risks these poses to both the platform and its users.

Merchant fraud often involves fraudulent activities where malicious actors might attempt to register as legitimate merchants and exploit the platform to process transactions without delivering goods or services. This can lead to financial losses for both buyers and the marketplace itself as customers may encounter non-fulfillment issues, which can damage the credibility and trustworthiness of the entire platform.

Account Takeover fraud involves an attacker gaining unauthorized access to a legitimate user's account, which can result in financial theft, unauthorized transactions, or compromise of sensitive information. This type of fraud can erode user trust significantly; customers need to feel secure when using a marketplace, and account takeovers can lead to reluctance in transaction completion.

By paying particular attention to these two types of fraud, a marketplace owner can implement stronger verification processes, transaction monitoring, and robust security measures to protect both their business and their users from potential threats.