Three Identity Security Trends Retailers Can’t Ignore in 2026
In this article, Ricardo Amper, Incode’s founder and CEO, writes in Total Retail about three identity security trends retailers need to plan for in 2026. First, he argues that fast, easy identity verification is becoming a way to earn customer trust and loyalty, which in turn drives sales. Second, he describes how AI is fueling new kinds of account and payment fraud. These include bots that take over accounts with stolen passwords, synthetic identities, fake refund claims, and deepfakes aimed at face checks. Third, he makes the case for security with less friction: face or fingerprint sign-in in place of passwords, AI fraud detection that asks little of the customer, and extra checks only at critical moments.
Read the transcription of this article, published by Total Retail on January 26, 2026.
After a turbulent 2025, retailers were hoping for a strong golden quarter to close out the year. But their adversaries also typically thrive during the holiday season, as shoppers flood online stores and sales are prioritized over fraud protection. It’s a challenge set to continue in 2026. Some 90 percent of U.S. businesses are concerned about fraud, according to Experian.
Online sales in the U.S. are set to grow 8.8 percent in 2026. However, retailers without a plan for tackling the fraudsters will struggle to cash in.
Rising Fraud Complexity
According to our data, the share of transactions deemed fraudulent across all sectors increased from 1.27 percent back in 2022 to 2.1 percent in 2024. But in retail, the figure for 2024 was more than double, at 5.74 percent. This speaks to the challenges facing businesses in the sector. On the one hand, they face an unforgiving commercial environment where every sale should be counted as a win. However, the bad guys are getting better at hiding their nefarious activities, which can take a significant reputational and financial toll.
Modern fraud tools have made it easier for attackers to launch sophisticated schemes. And artificial intelligence has enabled the creation of synthetic identities that can bypass traditional identity verification checks.
3 Trends to Look Out for in 2026
With this in mind, three trends are worth keeping an eye in 2026:
1. Identity will be the new currency for trust and loyalty.
Uncertainty is the only certainty for today’s retailers. Sticky inflation, geopolitical tensions and unorthodox trade policy have created a potentially combustible mix. Against this backdrop, strong sales performance is more important than ever. But hard-won customer loyalty can be easily lost, especially if fraud levels continue to rise.
Identity can become a bulwark against such a scenario. Retailers able to verify their customers are who they say they are, quickly and seamlessly, will minimize fraud and cement loyalty. This will, in turn, help to drive sales. With e-commerce fraud expected to exceed $107 billion by 2029, retailers will need robust identity verification practices to safeguard their customers and maintain confidence in their brand.
2. AI-driven account and transaction fraud will proliferate.
AI is changing the game for fraudsters. Some 72 percent of business leaders expect it to be a major challenge in 2026. The technology helps to automate sophisticated bots capable of using stolen credentials to hijack customer accounts. Once inside, they can steal personal information and loyalty points, or potentially make fraudulent purchases with stored cards.
AI can also create synthetic identities from real and stolen personal information. These stand a better chance of bypassing traditional checks, especially during onboarding and when applying for retail credit cards. AI might also be used to generate fake receipts or images of damaged items to help individuals claim fraudulent refunds.
Then there are deepfakes, which can be used to bypass biometric (facial recognition/liveness) checks. The affordability and quality of the technology should be a concern to every retailer. One recent study claimed a fifth of biometric fraud attempts are now carried out via deepfakes.
3. Smart retailers will integrate friction-free security into operations.
Fraud can harm growth. But so too can friction. One 2024 study claimed $3.7 trillion of global sales are at risk due to poor customer experiences. This is why retailers must focus on frictionless security. That means biometric rather than password-based authentication. And fast, AI-driven fraud detection that doesn’t require unnecessary user intervention. Reauthentication at critical points in the customer journey can optimize security without disrupting the user experience.
Looking Ahead
Fraud isn’t slowing down, and 2026 will bring new challenges for retailers and digital platforms. The companies that stay ahead will be the ones that make identity verification feel effortless — keeping customers safe while letting them move through the experience naturally. Embedding smart, frictionless security throughout the customer journey will help retailers reduce risk, keep operations running smoothly, and maintain the trust and loyalty that drive long-term success.
Ricardo Amper is the founder and CEO of Incode Technologies, a company that develops AI- and ML-powered, privacy-centric solutions that help banks, governments, retailers, and other industries reduce fraud, increase revenue, and deliver seamless user experiences.
About Total Retail
Total Retail is the go-to source for executives looking for the latest news and analysis on the retail industry. Through various forms of content and community-building events, Total Retail serves its mission to provide retail executives with the information they need to do their jobs more effectively.