Fraud is pervasive on the 'Net - and it is wreaking havoc on the reputation and profits of enterprises in all industries and of all sizes.
There are solutions of course that aim to minimize (if not eliminate entirely) the issue of fraudulent transactions (including vendors such as Signifyd, ThreatMetrix, Riskified, Kount, TrustVesta and others), but exposure to and implementation of these offerings on the part of a majority of today's Internet retailers is often lacking.
Let's take a closer look at how one company in particular, travel agency Kiwi.com, decided to handle the rather serious issue of ecommerce fraud after seeking out a solution that could meet its need and combine both accuracy and scale.
When Manual Review Won't Do
Like many other enterprises, Kiwi understands the important role that customer experience plays in their success. While "frictionless" service may be the ultimate aim, fraud prevention solutions came up somewhat short in this regard. That obviously would not do in the often high-risk travel industry.
Kiwi had long used a third-party solution (one which provided a chargeback guarantee) but like many other offerings it was not automated and required a significant amount of manual review of the transactions that occurred. As a result, time was wasted and (likely) the customer experience and the perception of the brand was negatively influenced. For example, in some instances, the manual review process actually required Kiwi to call customers or worse, have them send a photo of their credit card or passport.
Kiwi, which was growing at a significant rate (140 percent annually according to the company), knew that in order to keep its website and consumer experience fast and frictionless, it would need an alternative to manual reviews (averaging five minutes each).
Kiwi ultimately turned to
Forter, a provider of automated fraud prevention solutions in the hope there would be no more delays in confirmation due to manual reviews as every transaction would receive an approval/decline response in real-time.
Using Forter's technology, an algorithm was employed that addressed Kiwi's specific challenges, personas and patterns, an approach that ultimately kept approval rates high and chargeback rates low - even as the travel agency eliminated manual reviews and continued to scale.
The approval rate remained high, and actually managed to increase slightly by 0.5 percent. More importantly, of course, is that based on an analysis of the period between Oct. 2016 and March 2017, chargebacks at Kiwi decreased by 40 percent.
Payment Security Steps
Ecommerce fraud prevention solutions are an important part of operating a successful Internet-based retail business, but there are steps that sellers can take to prevent the problem from getting out of hand if utilizing these offerings is not possible.
Achieving and maintaining payment card industry (PCI) compliance, for example, ensures that merchants and their customers are protected from fraud and data breaches, as is always requiring address verification system (AVS) and card code verification (CVV) in payment gateways.
Perhaps the best guidance for today's Internet-based sellers, however, is to simply be mindful and cautious - watch for suspicious activity including transactions that are unusually large or high-priced, as well as orders with billing addresses that do not match the IP location. The main rule in fraud prevention should be "when in doubt, check it out" - not only are you protecting consumers but the business as well (and that is worth doing no matter how long it takes).
Digital Advertising Fraud in Focus: Fraud is not just a problem in ecommerce, it has long been an issue within the realm of digital advertising as well. Find out how solution providers are helping business reduce advertising waste and protect their bottom line in Website Magazine's 2017 Advertising Fraud Solution Roundup at
wsm.co/fraudup.