The game continues to change in the eCommerce space as fraudsters get more intelligent by the day. There is a lot of risk exposure for eCommerce stores due to the impact fraud can have. Fraudsters are always looking for ways to game the system and cause extensive revenue losses for online retailers.
There continues to be growth in the anti-fraud space. Fraud detection tools are now more available than ever to help detect fraud early enough to stop the action in its tracks. The tools allow for screening of all transactions, picking up on risk factors and flagging alerts to allow you to proactively decline fraudulent transactions before they ever process. Let us take a closer look at some of these fraud detection tools available in the eCommerce space.
Using Machine Learning
Machine learning is one of the best ways to help you detect fraud. With machine learning, you can do analysis on the fly with transactions. This can allow you to pick up on things that may look out of whack. Machine learning algorithms can scan your transactions so that they can pick out anomalies. This can identity high transaction volumes, big-dollar spending, etc. All these can lead to fraud signals to act on.
Automation to Cancel Fraudulent Transactions
When you need to act on fraudulent transactions, you need to use automation in a big way. Automation can allow you to act when something like machine learning picks up on a potentially fraudulent transaction. This can allow for the automation of the order cancellation, taking it off of your orders before it ever has a chance to process.
Employing Address Verification Services
Employing Address Verification Services (AVS) is another great tool to help you confirm transactions to ensure they’re legitimate. This type of service will take the billing address of a customer and check it against the billing address on file with the credit card issuer. This helps to detect fraudulent transactions as the AVS service will also add and match up the house number and zip code of the transaction requester. When there is a flag, your automated workflow can work to decline the transaction.
Requiring Card Security Codes
You can also use a tool that will require the entry of credit card verification or security codes. These are three or four-digit dogs that are the CVV2 or CVC2 of a credit card. This extra verification adds an extra layer of security to help you avoid the risk associated with the card not present transactions.
Installing a Fraud Detection Tool Suite
There are some tools out there that you can also install. An example would be the tool provided by the vendor SEON. The SEON.IO product line is all about helping you with the prevention of fraud. In most cases customers see an ROI in about 3 months.
The goal with what seon.io does is that it will constantly be reviewing all the transactions going through your system. It will do this in an automated fashion to allow for the reduction of manual review. The idea is to sort transactions into 3 categories: approve, decline and review based on rule sets that give risk scores. Since these rules can be tailored to your specific business, you will be in better control to prevent illegal activity, while also reducing manual workload.
As you can see, there are a lot of options out there when it comes to fraud detection tools. Employing a range of these tools can help you build a wall that can keep the fraudulent activity out for good. The more proactive action you take, the better off you will be in keeping your business safe and secure.
