Invest in the right eCommerce online fraud prevention solutions
Fraud in e-payment transactions is a global problem. We find fraudsters maneuvering in all countries and industries. With more and more people using the internet in recent times e-fraud is becoming common as the internet allows fraudsters to appear anonymous. The Internet has proven to be an effective tool for perpetuating fraud as it conceals the real identities of those who interact with it, allowing fraudsters to stay anonymous. Payment fraud affects consumer confidence in non-cash means of payment and ultimately the real economy.
As per a study, eCommerce merchants may lose an estimate of $24 billion to online payments fraud. No matter how scary it is, online fraud prevention solutions can make a big difference in customer safety and financial results. The good news is that e-commerce retailers have tools at their disposal to fight back. Merchants are looking to gain more control over their revenue and detect online fraud. They’re finding solutions in the form of dynamic end-to-end payment protection that extends throughout the consumer payment lifecycle.
Easebuzz offers payment solutions that are compliant with the requirements of ISO 27001:2013 about operating its information security management system. With encrypted payment services, customers are aware of what data is being collected during the payment process. However, understanding the numerous dimensions of payment fraud is necessary for assessing the risks and combating payment fraud.
Analysis of how online payment fraud space is evolving
E-payment frauds have a multiplicity of types and there is no exact number or fixed list of these types. Frauds are classified as online fraud and offline frauds. Online frauds occur when fraudsters possess a legitimate company to obtain sensitive personal information and illegally conduct transactions in the existing accounts. Protecting your ecommerce business requires the best online fraud prevention practices, flexible tools that leverage advanced technologies like multi-factor authentication and machine learning, and automated chargeback management solutions.
Phishing and spoofing are examples of online fraud. Online fraud occurs when a fraudster steals personal information such as credit number, bank account number, or other identification and uses it repeatedly to open a new account or pledges transaction in the real individual/company‟s name. Phone solicitations, credit card fraud, print fraud, check frauds, and mail fraud are examples of offline fraud.
To prevent online fraud your business requires best practices, flexible tools that leverage technologies such as multi-factor authentication, machine learning, automated chargeback management solutions, and payment processing systems that are PCI DSS compliant.
Ways to detect online fraud
Account Hacking: Hacking includes gaining illegal entry into a PC. Fraudsters use compromised customer credentials to hijack the origination system and use it in the lawful account holder‟s name. Corporations are also targeted and easily get trapped.
Identity theft: Identity theft is a crime in which a fraudster illegally gets and exploits another person’s personal information in order to gain anything of value through deceit or fraud. For both the person whose information is stolen and the financial institution, identity theft/fraud is the most serious crime.
Phishing: Phishing is a well-known technique for obtaining confidential information from a user by posing as a trusted author. Phishing is an attempt by fraudsters to “fish‟ for your baking details through emails with attachments or hyperlinks. E-mail appears to be sent from legitimate organizations to trick people in order to reveal sensitive information. On clicking the attachment or the hyperlink the computer system gets infected with malware. The software will activate during the next online transaction and take private and personal financial information. The details include credit card details and PIN numbers, which the fraudster will exploit to steal money from the account.
Check frauds: Electronic check frauds can be easily committed; the fraudster needs a scanner, printer, and desktop phishing software. The most common forms to check fraud for online fraud prevention includes altering checks, forging endorsement, counterfeiting checks, and creating remote checks.
Online fraud prevention and detection
How do you fall into the online fraud trap?
With the increase in e-commerce sales, merchants face challenges to reduce fraud in epayment transactions. E-frauds start with the diversion of personal information. A poorly protected computer, a trash or recycling bin, an email message, or chat on the internet exposes the fraud. For the merchants, the majority of fraud loss is due to the consumer’s claim of fraudulent account used and/or subsequent information from additional orders placed by the fraudster.
Fraud has become a persistent threat to merchants in e-payment transactions in e-business. Although it is impossible to completely eliminate the risk of fraud, timely interventions can help to lessen the risk. For online fraud prevention, merchants and financial institutions can take necessary measures such as opting for PCI DSI compliant payment processing solutions in tackling fraud effectively.
The direct costs of e-commerce fraud, including losses and the costs of prevention, motivate merchants to seek solutions that help them gain better control of their revenues. Here are some measures for online fraud prevention in the eCommerce business.
- For your ecommerce platform make sure you use a reliable and compliant online payment processor such as Easebuzz.
- Use fraud detection and management software to detect high-risk transactions.
- Utilize Verification System (AVS) and Credit code Verification (CVV), it will confirm that the address information or CVV included with a transaction matches.
- Make sure that all the websites that speak for the online stores are secured with HTTPS.
- Analyze the risk factors and perform fraud risk assessment regularly.
- Make sure the online payment process is compliant with rules, applicable laws, and regulations.
- Perform online fraud prevention and awareness sessions for employees and customers.
Online fraud prevention involves taking measures to stop fraud from occurring and while fraud prevention fails then the merchant takes steps to detect the frauds quickly and stop it as soon as possible. Fraud prevention and detection involve planning, detecting, and avoiding risk. Frauds can be controlled by monitoring the internet threats, understanding the customer, and implementing security measures. Different techniques are required as there are different types of fraud in epayment transactions.
Merchants are concerned exclusively with minimizing chargebacks. E-payment fraud has an impact on profits in different ways like revenue loss, cost on staffing for manual review, and administration of fraud claims. Merchants can take a total risk management pipeline view of the operation and can gain efficiencies. The risk management pipeline view involves activities automated screening, manual review, order dispositioning, and fraud claim management.
A secured e-payment transaction system is critical to e-business. Without a secured payment transaction system, e-commerce will be a castle built in the sand. Integrate a secured and reliable epayment transaction system to prevent online fraud. This helps ecommerce in accepting, transmitting, and processing card-based information in a secured environment.
Wrapping up of transactions
Payment fraud is real and represents a growing threat to your bottom line. It can be devastating for low-margin businesses. Online fraud prevention solutions are effective in mitigating basic fraud events. However, investing in more robust fraud detection and prevention solutions makes use of advanced machine learning technology. It helps mitigate sophisticated fraud events with greater accuracy. Easebuzz offers comprehensive fraud detection solutions for a variety of business types and industries, including e-commerce operations of every size.