The transition in purchasing habits and the influence of COVID-19 have contributed to the domination of eCommerce businesses in the global economy. Unfortunately, the number of scams has increased alongside the popularity of online sales. In this day and age, no reputable firm can function without some kind of software for ecommerce fraud prevention.
Why Is eCommerce Fraud On The Rise?
The growth of online shopping has outpaced the development of cybersecurity and fraud detection technology by a factor of 209% in only the past year. Companies lose an average of 7.5% of their annual revenue to fraud.
Identifying Top eCommerce Fraud Trends
- Compromised Business E-Mail
This fraud targets companies that regularly send money via wire transfer to international partners and vendors. This scam begins with an attempt to gain access to a victim’s bank account by hacking into their email in an attempt to steal their credentials.
- Security Breach
It can occur on an individual or corporate level and refers to the disclosure of private or proprietary data. Data is typically stolen or copied from an existing database.
It’s a type of program made specifically to infiltrate computers and networks and cause harm or even disable them.
Malware of this sort aims to compromise an organization’s most precious data or systems by exploiting its most vulnerable areas, both technical and human. When the victim realizes they’ve lost access to crucial files, the criminal will demand a ransom in exchange for giving them access again.
Significant Measures To Tackle eCommerce Fraud
- Take Advantage of AI and ML
Using only human discretion to detect and prevent online fraud is challenging. Artificial intelligence protects against fraud by acting as if it were a human fraud analyzer, but without making any mistakes. Unlike a human, it quickly and flexibly balances the risk of fraud against the value of the consumer.
- Apply A Risk-based Strategy To Authentication
Password protection for customer accounts is an efficient means of minimizing fraud. It is more difficult for hackers to access a customer’s account when the password is more complex. Using risk-based authentication, financial institutions can adjust the intensity of their oversight across the whole authorization process RBA.
There’s a direct correlation between how thoroughly something is checked and the level of risk involved. The authentication process should be toughened up in places where fraud is more prone to occur.
- Make All Card Security Codes Work The Same Way
There is an increased possibility of fraud with some kinds of online business dealings, namely those involving CNP. Customers engaging in a card-not-present (CNP) transaction are not required to physically produce their credit or debit card.
CNP transactions are commonplace when users make payments using a mobile application. Since stores and service providers have a more difficult time confirming the customer’s identity throughout these transactions, fraud is a greater concern.
Security codes on credit cards can help prevent card-not-present fraud. Reduce fraudulent purchases by demanding a 4-digit verification number from every credit or debit card used.
- Utilize A Service For Address Verification (AVS)
When sending packages, fraudsters may use a variety of false addresses. Gaining your consumers’ trust through the use of an AVS is a smart business move. Companies that issue credit cards provide a service called address verification services (AVS), which checks the user’s provided address against the bank’s database. As a result, a unique AVS code is provided to the store or company.
Using AVS codes, discrepancies in ZIP code data, such as misspelled street names or improperly formatted house numbers, can be identified. There is a cost associated with each credit card authorization made through a processing service. Nevertheless, AVS can help organizations decide whether to accept, reject, or flag transactions, thereby lowering fraud risk.
- Training For Front-Line Employees In Customer Service
Some research suggests that education and training can go a long way toward halting dishonest practices. The risk of fraud can be reduced by keeping a strict security system in place and staffing the help desk with knowledgeable individuals. Customer service representatives who have undergone anti-fraud training are better equipped to identify potentially fraudulent inquiries and respond properly.
- Choose a Reliable Payment Processing Service
One of the simplest and most secure ways to keep your eCommerce site functioning smoothly is to hire a third-party payment platform to keep an eye out for fraudulent behavior. Off-site payment processors deal with refunds and customer information storage.
One of the most important parts of a customer profile to protect is their credit card information. As a result, the frequency with which cybercriminals target an online store can be reduced by using a third-party payment service.
- Follow PCI Requirements
With the help of the Payment Card Industry’s recommendations, online fraud can be avoided by both merchants and their customers. Large payment gateways typically follow PCI standards. However, before settling on a single payment processor, enterprises should conduct thorough research.
- Ensure Your Anti-Fraud Program’s Accuracy Constantly
An up-to-date anti-fraud solution is crucial if you often use online payment systems for a company. Fraudsters are constantly coming up with new methods to avoid being detected; therefore anti-fraud solutions must be adaptable to keep up. However, if your company is using outdated software, it could be at risk from new types of fraud.