Digging Deep into E-commerce Fraud
The business of buying and selling online is moving at an incredibly fast pace. This pace requires merchants, issuers, acquirers, third-party technology companies, and customers to be ready for and accept change. Change is not always something welcomed in the business world, but in this age of e-commerce and mobile business there is no such thing as a static business practice. Amid this boom in e-commerce sales we are also seeing something else: a boom in e-commerce fraud.
To combat this e-commerce fraud surge, new technologies are continually being introduced to secure online sales and prevent fraud. Juniper Research recently published a white paper titled Online Payment Fraud Whitepaper 2016-2020.
The aim of this whitepaper is to take a deep look into the state of online payments and e-commerce fraud. To help merchants gain a better understanding of how to manage the challenges that come with e-commerce and mobile payments, we’ve put together an overview of some of the important findings from this research.
The Pace of E-commerce Fraud
As indicated above, the pace of e-commerce fraud is one that is hard to contain. The rapid evolution of mobile and e-commerce sales allow fraudsters to quickly develop new tactics to expose weaknesses in security and fraud prevention mechanisms.
The rise in e-commerce fraud can be attributed to three key factors: the increase in new online payment accounts, account takeover fraud, and high numbers of payment fraud. Combine these with the increased use of mobile devices by consumers to purchase items, and we’re seeing an even bigger gap in security.
Whereas security for PC and laptop (home and office) has always been a major focus and considered a point of threat, the same attention is not being given to mobile device technology. This makes mobile and e-commerce sales ideal targets for savvy fraudsters.
The good news is that financial institutions and merchants are aware of these security gaps and are taking steps to mitigate the risk. The research conducted by Juniper Research supports the position that what was working before will not work today.
“A few years ago, in-house Fraud Detection Prevention (FDP) solutions might have been adequate to keep fraud to acceptable levels. However, this is no longer the case. Fraudsters now operate globally and need to be dealt with by means of sophisticated, real-time fraud screening solutions, supported by an understanding of the latest fraud patterns and behaviours around the world.” – Online Payment Fraud Whitepaper 2016-2020, Juniper Research
Ensure that your FDP solution is working for you at both the front and back ends of the transaction cycle to give you end-to-end protection. Take advantage of solutions that provide you:
- Multi-layered protection: The ability to monitor the device and user, analyze data about user behavior, and transaction monitoring.
- Advanced data analytics: The ability to monitor transactions and activity as they happen across all sales and transaction channels.
The data provided by these FDP solutions provides you the opportunity to stop e-commerce fraud before it happens and to locate your biggest threats.
Preventing E-commerce Fraud
You know that e-commerce and mobile fraud have become huge risks to your business. And e-commerce and mobile markets should not be ignored. So, now you need to make sure your FDP solution is up-to-date and you’re using the latest in technology and security measures.
When looking at your current solution and talking with payment solution and FDP solution providers, be sure to ask some key questions about their approach to e-commerce fraud prevention:
- Does the solution take advantage of real-time analysis and fraud detection?
- What are the data analytics capabilities of the solution?
- How can you help in implementing mobile security?
- Are you using advanced security such as fingerprint technology and voice recognition?
Ultimately, you need an e-commerce fraud prevention strategy that works to prevent fraud, collects data on all online sales, and makes this data available to provide support to respond to chargeback fraud or any other breaches in your payment solution. The more data analysis you have, the better your chances are of finding any weaknesses in your solution.
Your customers want to be assured that they are using a secure e-commerce payment solution, but they do not want to be overburdened with questions, confirmation requests, and other security or authentication measures.
As always, the chargebacks.com team is here to help you with any questions you have about chargeback fraud, e-commerce fraud and security, and in improving your end-to-end protection.