We live in the age of internet and e-commerce. We are proud of the fact that everything is just a click away – be it groceries, apparels, products or services. One of the perils of this lifestyle is online fraud,which is increasing at an alarming rate. From fraudulent online purchases, to fake products being delivered, to products being stolen in transit, it has all happened and all of us have read about these incidents. The Indian e-commerce industry today faces the challenge of containing these creeping instances that tear into its business and reputation. Fraudsters are getting better and internet payment frauds are only increasing, in fact, getting unstoppable.
Bank frauds via fraudulent cards started with the advent of the luxury called credit cards. The cases were so many that at a point, credit cards were not allowed to be used to make online payments. A lot of protocols, mostly crude and largely random, were put in place to combat the problem. Fast forward, the rise of e-commerce fraud is all time high.
However, fraud is not exclusive to credit card payments. Online banking logins via smart gadgets, stolen bank account details and even “alternative” payment methods are also attracting criminals. So how can you combat this?
Here are a few methods that you need to make a note of if you soon plan to launch your own ecommerce store:
Assess and improve authentication
One of the biggest areas where companies need to pull up their socks is on the security authentication. According to Geoffrey Turner, a senior analyst at Forrester Research Inc., Identity theft is the root is online fraud.“Ultimately, online fraud is of the magnitude it is now because we have a poor capability to know who’s who,”he says, as statedby Webroot. It is critical to evaluate emerging authentication technologies and understand whether they are suited for your business or not. Modern risk analytics combines the best of authentication methods, analyses transactions in real time and determines whether there is a need to authenticate them. By making certain fields, such as full name, telephone numbers, email addresses and billing address mandatory, e-commerce companies can easily detect fraud.
Take a look at the current online authentication processes available and determine if your fraud risks justify adding more layers of sophisticated measures or not. Evaluate whether the level of risk to your organisation means you should work more to prevent fraud or to recover from it. Make sure there is an auditing system in place before you deploy anti-fraud technologies and processes. As part of a risk management system, online retailers should have transaction controls in place that can help identify high-risk transactions. For instance, putting a low spending limit for new customers could be an effective method to reduce fraud score.
New solutions at the door of technology
Technology is churning out new solutions to combat the common threat of online fraud. One such solution has been created by an Israeli online fraud prevention company, Forter. It removes the responsibility of fraud detection and user authentication from retailers by providing retailers to manage the amount of revenue lost to fraud every years.
The software it has created uses a combination of cyber intelligence with behavioural and identity analysis to help retailers refuse fraudulent transactions within 300 milliseconds. A survey conducted by them revealed that the fraudsters usually aim for luxury items and hence easier to find when sectioned out.
As a company looking out to make more revenue, you should know your ROI before you make fraud prevention investments. Instead of putting all the expense on the front edge, you should deploy it based on the level of risk of the transaction. Also, take a look at how government agencies are bolstering online security. Be aware of what they are doing to see what can be leveraged in the private sector.