Today, cybersecurity has become a leading challenge for businesses working digitally. To keep malicious third parties at bay and prevent data leaks and instances of fraud, businesses use a fraud management system that keeps their data and business secure.
A fraud prevention solution work clock in the background quietly and monitors customer activity which includes visiting the platform, browsing through products, creating an account, logging in, sharing their data and completing their purchases. There is a wide range of fraud management solutions available for businesses to choose from. Each solution focuses on some of all of the critical touch points that exist along the customer journey. Not every solution focuses on all the touch points, so make sure you choose one that does.
Importance of Fraud Management Systems:
For a business, tackling fraud must include changing the methods of payment currently being accepted. It should also include chargeback monitoring and buyer verification. If the rate of fraud instances in a single merchant goes too high, the credit card vendor can revoke the payment processing capabilities of the merchant. Additionally, the vendor could be blacklisted or their reputation ruined, which would limit their growth prospects and disperse their customer base.
Of all the small business prepaid digital solutions in the market, a fraud management system is among the most effective. Businesses need specialised solutions to detect and prevent fraudulent activity. Such solutions take effort and time to deploy and implement. Several business merchants don’t have the experience or capabilities in-house to oversee a fraud management team. For this reason, opting for an end-to-end fraud management solution can protect businesses without putting the pressure of solution management on the merchant.
Types of eCommerce Fraud:
The leading types of fraud can be categorized into three categories. Businesses must take all precautions and measures to prevent them so that their data and customers are secure.
1. Triangulation fraud:
This type involves three parties – the fraudulent third party, the unsuspecting customer, and the e-commerce platform. The fraudster builds a store online that provides high-demand products at lower prices. When the customer places their order, the fraudster steals their debit or credit card information and then orders it online through a legitimate online store using the customer’s stolen credentials.
2. Interception fraud:
In this incident category, malicious hackers create online orders using stolen credit card data. The products get delivered to them while the expense is borne by the person whose credit card details were stolen.
3. Account takeover fraud:
This is commonly known as identity theft. A malicious third party gets access to a customer’s registered credit account and misuses the data and credit card credentials to pretend to be a trusted buyer.
Features of a Strong Fraud Management System:
1. Fraud visibility:
Fraud prevention solutions need to ensure stronger visibility into various types of frauds that customers and businesses are at risk from today. This includes fraud from other payment methods like netbanking, bank transfers and e-wallet transactions. Choose a fraud management solution that provides fraud visibility for the highest number of digital transactions to help recognise fraud and attack attempts much faster.
2. Customisation options:
Businesses today need a solution that blocks all fraudulent transactions while allowing valid transactions to go through. This helps businesses to ease up about fraud risks and focus on their business offerings. It also allows businesses to adjust relevant settings and create new rules for accepting payments that adhere to their industry, legal regulations and compliance needs.
3. Machine learning capabilities:
A credible fraud management system today will have advanced tech integrations including machine learning and AI that can evolve and improve fraud detection methods over time. This ensures businesses remain secure and all ‘false positive’ transactions can be eliminated so that revenues are not affected. Several fraud prevention solutions use AI and machine learning to set up the right processes and improve fraud detection methods and accuracy.
4. Easy integration with existing systems:
Deploying and integrating a fraud management system with existing cybersecurity infrastructure can be challenging for businesses if it isn’t done right. Go for a solution that can integrate easily with existing payment processing solutions, or better yet, opt for a payment processor that provides integrated fraud management and prevention capabilities. Using a tool with easy integration can simplify operations and initial challenges and ensure seamless business operations.
Top eCommerce Fraud Management Systems Today:
- Areion by Wibmo – Payment processor with an integrated fraud management system
- Signifyd – Protection against revenue, payments and abuse
- Sift – Digital safety and trust with chargeback prevention
- Kount – 13 years of business data
- Vesta – CNP experts with telecoms expertise
- Arkose Labs – Script and bot attack mitigation expertise
As you can see, there is a wide range of solutions available for fraud prevention and management. But which one should you choose for your business? Every business has different needs, so merchants must identify their unique requirements and use a solution that helps meet their needs.