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Fighting Fraud With Fire

How to avoid feeling like a cold turkey this Christmas

eCommerce Fraud

I won't burden you with arbitrary figures on internet fraud for retailers and brands alike, believe me when I say it's a colossal figure and a particular pain-point for retailers jumping into eCommerce. 

Worryingly, the status-quo when a retailer typically decides to jump into online retail is the first thoughts are not always about eliminating fraud or protecting your bottom line (or the customers' security).

The story goes; A retailer will tender a project for design agencies to pitch, of which will come back an over-the-top quote with numerous back and forth negotiations on cost and design revisions. The design agency will rarely discuss what eCommerce infrastructure they'll adopt and what content management system will be available, let alone what fraud protection solution is in place. 

Fraud foresight

Luckily for you, we're on your side and will illustrate some best in class solutions to consider, as well as showcasing why it's important to offer choice in your payments domain.

Payment gateway options is vital, a payment gateway is the secure tokenisation of accepting credit and debit cards from guys like Visa, Mastercard and American Express. I won't go into length on gateways but Worldpay is an example. Gateways also include services you'll have heard of, such as PayPal and ones you may not have heard of, such as AliPay or Stripe. You want to include marketplace payment services such as PayPal and AliPay for increased consumer confidence in their purchasing security and also for convenience, increased conversions, repeat purchasing and subscription commerce. All huge drivers of sales. Furthermore, increased merchant security for yourselves to protect you from fraud and chargebacks, PayPal and AliPay have dedicated fraud departments to handle queries and a decade of transactional behaviour to build and tweak their anti-fraud algorithms. 

Stripe announced yesterday their commitment to fighting fraud with their proprietary solution, Radar and it comes pre-built into their gateway solution for an all-in-one encompassing transactional monitoring system.

What if you don't want to adopt Stripe and want to go down the road of electing to adopt a robust fraud protection system, specifically aligned with eCommerce.

Signifyd, Riskified, Forter and Threatmetrix are all good places to begin your search. Key elements to look for? 

- 100% guaranteed to be covered on chargebacks 

These solutions pride themselves on being equipped with identifying fraudulent transactions and stopping them before they occur, in the event of a breach they endeavour to cover the costs of your loss. How nice of them but be sure to familiarise yourself with the terms that run parallel to this act of good faith. 

- Able to easily and succinctly set rules

Rules that empower you to accept or decline transactions at the source are dependent on whatever variables you want to introduce, it's in this very granular environment where you may want to speak to myself on to understand what's required for your business parameters.

- Viewable dashboard with admin controls 

Greatest respect to your sales assistants, you don't want them sifting through sensitive information or able to alter your rules at the click of a mouse; but you will want to grant a degree of access for them to jump in and review any mysterious transactions to be flagged or handle innocent customer resolutions for failed transactions and so on. 

- Behavioural analytics included in rules

If your fraud solution doesn't indicate what behavioural characteristics are in review or provide you with the capacity to include those traits as rules, then avoid this solution like the plague, it'll hurt you in the pocket.

What are behavioural characteristics anyway?

Your debit/credit details are accessed via a secure network by anti-fraud institutions to map what sales are occurring with your details across the network, that in part is why Banks no longer need to be notified you're going abroad on holiday. Every time your details are used in a transaction a millisecond call is made to the provider (your bank) to authorise the transaction and a catalogue continues with values, locations, category of purchase and so on; this data is sold to research firms such as Deloitte, sorry. 

With eCommerce so much more than just order value, item volume, location, category and frequency can be analysed. You have a unique pattern when you shop, you'll move your mouse or tap at your own pace, you'll view certain items or brands routinely, you'll have a pattern when adding items to your cart, you'll pay at your own pace, you may return numerous times before electing to pay... this information is mapped against historical purchases with your details. It's why your credit card if used once in a blue moon may be rejected, again sorry. 

These are the rules you'll want to isolate, control, monitor and tweak in an on-going basis, alongside any promotions or coupons you integrate with your loyalty scheme.

If a customer opts for guest checkout, selects a whole bunch of high value items, shoves them into a cart and attempts to pay without a second for thought, you'll want to ensure you have rules to block that transaction because that is just outright strange. Same if the address is assigned to a bizarre country on a UK debit card. 

However, if you're seeking to understand where smarter fraudsters are lurking to strip your business of its integrity, security and customer protection then reach out to us for a more elaborate analysis that's tailored to your retail volumes and values.

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