Issa Asad Gives 3 Tips to Help Merchants Combat Ecommerce Fraud
Credit card information can be easily acquired on black market which may be used by thieves for ecommerce purchases. When the customer doesn’t recognize a transaction, they will dispute the charge resulting in a fraud chargeback towards the ecommerce site.
“Almost every ecommerce store faces the threat of fraud chargebacks subsequently having to refund the entire transaction amount along with a chargeback fee,” explained Issa Asad Florida entrepreneur and CEO since 1996. Mr. Asad is the CEO of Q Link Wireless and Quadrant Holdings, located in South Florida. He is also the author of 4 e-commerce and marketing e-books that can be purchased on Amazon.
According to reports, retailers in the US lost over $32 billion to fraud in 2014. Below given are 3 tips to help merchants combat ecommerce fraud.
Here, Issa Asad Gives 3 Tips to Help Merchants Combat Ecommerce Fraud:
1. Using gateway filters against fraud
Payment gateways provide merchants with the facility to set up certain filters in order to block or mark suspected transactions. Basic examples include declination of transaction when shipping address is different from billing address, exclusion certain areas or regions, etc.
This option is advisable to merchants facing low risk of ecommerce fraud. Although this solution is cost friendly, it is not enough for businesses that face a moderate to extreme risk. Also, the inability to modify the rules leads to numerous false declines.
2. Reviewing Manually
Merchants can also use personal staff to review all the transactions which are marked. These transactions can include a variety of factors for being marked such as transactions beyond a certain limit, transactions with different shipping and billing addresses etc. After the release of EMV chip technology, the frauds in ecommerce rose in UK and Australia by 50 and 79 percent, forcing the merchants to use methods like Google Maps and social media tracking before processing suspected transactions.
On average, this solution is far more effective than gateway filters. Around 26 percent of total transactions are reviewed out of which 80 percent are passed. The results can vary greatly depending on the skill of the employee and there is always a risk of losing skilled employees for merchants when using this option. Since this solution can also result in a bottleneck situation during high amount of orders, it is advisable only for merchants who are facing low to moderate amount of fraud risk.
3. Third Party Companies
There are a number of companies to help merchants prevent fraud (complete revelation, along with my company, NoFraud) using efficient and latest technology such as Geolocation, Piercing IP Proxies, Global Fraud Blacklists along with Device ID’s in order to lessen or remove fraud chargebacks. On average, merchants lose $2.40 per transaction to fraud but they can choose from a range of solutions to avoid this. The basic methods include a risk score along with tools for building an algorithm to prevent fraud, whereas, advanced solutions may include machine learning to derive a positive/negative response, including reimbursements for fraud chargebacks resulting from wrong decisions.
This option is highly efficient against fighting fraud since through these techniques only 1.5 percent of legitimate transactions are rejected. They remove the need for any manual reviewing and the outcome does not vary depending on the skill of the employee. Although these solutions require expertise to set up and maintain the fraud protection, they mostly return the investment through reduced chargebacks. Merchants and businesses facing a high risk of fraud and those wanting to free up resources specially dedicated for fraud prevention are advised to choose this option.