eCommerce Fraud Detection Best Practices for Businesses

1. eCommerce Fraud Detection: Best Practices for Businesses

2. The rise of eCommerce businesses has been fueled by a shift in consumer buying habits and the potential impact of the COVID-19 outbreak in 2020. However, as online sales have increased regularly, the number of scammers has also increased. An eCommerce fraud prevention software is the only method for a business to operate safely in today’s world. WhatAre the Causes of Online Fraud? By 2022, eCommerce revenues will total more than 6.5 trillion dollars. There’s no denying that as eCommerce grows and more payment choices become available, so does the incidence of online payment fraud. There are several reasons why people conduct online payment fraud: Ease – Hackers purchase as many stolen cards as they want on the dark web. Anonymity – Fraudulent payments are common because they may be carried out without anybody being aware of them. Anyone can commit fraud without ever stepping foot inside a company or risking being caught on security cameras by fraudsters. Evasion – Ecommerce criminals are well aware that law enforcement agencies pay little attention to eCommerce fraud. Aside from that, the amount of money at stake in any one scam is often small as well. Best Industry Practices for eCommerce Fraud Detection Use AI and Machine Learning

3. To avoid and identify fraud in e-commerce, you should not rely just on human judgment. AI fraud protection mimics the job of professional fraud analyzers but without human mistakes. Quick and more scalable than a human being, it assesses the likelihood of fraud against the value of the consumer. Incorporate Risk-based Authentication Having a solid password requirement for your customers’ accounts can help to limit fraudulent activity. As a customer’s password improves, it becomes more difficult for criminals to access their accounts. Using risk-based authentication (RBA), financial institutions apply various levels of scrutiny to authorization procedures based on the amount of risk. There is a correlation between the level of danger and the level of authentication. Enhance authentication for experiences that increase the chance of fraud. Integrate Card Security Code Performance Standards There is a greater chance of fraud in some e-commerce operations, such as CNP transactions. CNP transactions do not need a customer to produce a credit or debit card to complete a transaction. CNP transactions are prevalent when clients purchase online via a smartphone application. Businesses and merchants cannot readily verify the identity of a cardholder in these transactions, increasing the risk of fraud. Using card security codes to avoid CNP fraud is a good idea. By requesting the three- or four-digit code of each credit or debit card, the likelihood of a fraudulent transaction is reduced.

4. Engage in Address Verification Services (AVS) Criminals frequently send things to a variety of different addresses. Using an Address Verification Service (AVS) can help businesses build confidence with their consumers. Companies that issue credit cards provide AVS services, which match a customer’s submitted address to the actual address mentioned with their bank. As a result of this, an AVS code is sent back to the company or merchant. AVS codes are used to identify inconsistencies in ZIP code data, such as an incorrectly formatted house or unit numbers. Each time a card is verified, a fee is levied by the credit card processor. However, AVS can help companies lessen the possibility of fraud by assisting them in deciding whether to accept, decline, or flag transactions. Select a Reliable Third-Party Payment Processing Company to Work With One of the simplest and safest methods to avoid eCommerce fraud is to outsource fraud monitoring to a third- party payment processor. These third-party payment processors are generally responsible for consumer chargebacks and data storage. Customers’ credit card information should be a top concern when it comes to protecting their personal information. As a result, a third-party payment processor can reduce the amount of e-commerce fraud attacks against a shop. Comply with PCI requirements Businesses may protect themselves and their consumers from e-commerce fraud by adhering to Payment Card Industry (PCI) standards. These rules are mandated by the Payment Card Industry Security Standards Council for online shops.

5. PCI standards are complied with by the majority of large payment processors. Nevertheless, companies must do their analysis before selecting a third-party payment processing company. Train Customer Service Executives Preventing fraudulent conduct may be aided greatly by proper training. Having a well-trained customer service workforce and a strict security system reduces the risk of fraud. Customer service representatives who have received adequate anti-fraud training are better equipped to recognize and respond to requests that may be false. Also read: Ultimate Guide to Improve Your Web Keep Your Fraud Detection Software Up To Date Keep your anti-fraud software up to date if you’re using it for eCommerce transactions. Malicious people are continually devising new strategies to escape detection, and anti-fraud software companies adapt to combat them at every stage. On the other hand, outdated software might leave your company open to new types of fraud.

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