Why Is E-Commerce Fraud Protection So Important
Posted by Mark from the General category at 22 Sep 2023 08:34:39 am.
The use of digital technology marks the present-day world. Market sizes and trends can change at a swift pace. Given the increasing importance of online commerce and the necessity for decisive protection measures, the e-commerce fraud protection market has certainly evolved in recent years. It does not seem to stop from growing.
Among the many factors that companies specializing in monitoring transactions focus on are the exact origins of the people sending and receiving the amount of money, the geographical origin of those transactions, whether they are inbound or outbound, and so on. These fraud protection professionals must keep up with the transformations that digital means of payment are going through and the ever-more sophisticated types of cyber-attacks that appear daily. Globalization can help these specialists keep track of the latest information concerning fraudsters' methods to trick people, entities, and companies.
For a general perspective on these things, it would be interesting to analyze a few relevant aspects for companies that focus on providing services to the general public and those specializing in e-commerce fraud protection.
When Is E-Commerce Fraud Protection Required?
Every online store needs e-commerce fraud protection. And the bad news is cybercriminals develop new strategies constantly. Therefore, building a secure e-commerce platform for your enterprise is very important. Because hacks that expose personal information or credit card numbers can damage a company's reputation, many people prefer to invest in protecting their data before anything terrible happens. In our digital world, credit card and ID thefts are rising.
Fraud protection is, therefore, required all the time, particularly for transactions from the e-commerce domain. Still, the good news is that your bank has already taken care of this vital aspect of modern-day online transactions, so you can use protective measures with every step you take.
What Is the World's Largest Anti-Fraud Organization?
The fight against online fraud involves several different organizations, which can be both governmental and non-governmental. There are also cyber security firms and other private companies.
The world's largest anti-fraud organization is called "The Association of Certified Fraud Examiners" and it is located in Austin, Texas. Among its various activities, it specializes in producing information related to fraud. This association also provides training and tools for fighting this dangerous phenomenon spread worldwide, posing real threats to the proper functioning of e-commerce businesses.
The ACFE grants professional designations such as that of Certified Fraud Examiner. Therefore, this association is of great help in training professionals who can thus better succeed in combating fraud across the USA and all around the globe.
What Percentage of Fraud Is Cyber-Enabled?
Cyber-enabled fraud is a type of crime committed through digital means. This fraud may include online scams, phishing attacks, cyber-attacks, and identity theft. Even though the percentage of cyber-enabled fraud can vary depending on the region, it has experienced an increase during the past years because so many people rely on the Internet and digital technology for numerous aspects of their daily lives.
The exact percentage of this type of fraud depends on the degree to which it is discovered and reported. Moreover, because fraudsters can quickly adapt to new technologies, this percentage can fluctuate. However, given the great importance of digital activities, this percentage is still a grave concern.
In a recent report from the UK, for instance, more than 60% of the crimes were cyber-enabled. The Interpol also warns people worldwide about the rise of e-commerce fraud and the need for protection against it.
What Are the Most Common Types of E-Commerce Fraud?
Credit card fraud represents one of the most commonly encountered types of identity theft. The card-not-present type of fraud usually happens when the card is not physically present, namely when the transaction is made online or over the phone. Some other methods that fraudsters use include using e-mail accounts, addresses, names, and IPs to appear as real customers in the eyes of their potential victims. However, because banks usually have fraud protection services, regular customers do not typically have to worry about spending extra money on theft insurance.
Another common type of fraud is that of fake accounts with promotional opportunities. Fraudsters nowadays are familiar with the various methods specialists use to check on them. Therefore, e-commerce fraud protection professionals must constantly upgrade their risk management techniques.
Friendly or chargeback fraud is another excellent example of commonly spread fraud that can happen on the Internet. It occurs when a customer makes an online purchase with their credit card, receives the product, and then asks for a chargeback from the part of their card issuing bank. When the chargeback is approved, the initial financial transaction gets canceled, and the customer receives a refund of the money they have spent.
What Top Features Are a Must for Any E-Commerce Site?
Although there is no single tool that can provide full protection against e-commerce fraud, there are some significant details that can make a real difference. For one thing, e-commerce fraud protection experts need to ensure real-time monitoring of the transactions. This way, they can detect potentially fraudulent activities as soon as they occur so that they can take immediate action, such as requesting some extra verification steps or blocking suspicious online transactions.
Machine learning and AI can also be of tremendous help in this respect. Thus, the system can learn and adjust to evolving fraud patterns. This technology has the incredible power of analyzing vast amounts of data. Because of that, anomalies get detected early so that fraud protection specialists can take the necessary measures in due time. Because of this adaptive approach, frauds get detected accurately, and false positives happen less frequently. Legitimate customers can thus enjoy a better shopping experience.
The verification mechanisms should also be stringent. Thus, implementing the Address Verification System (AVS) is a good idea, which checks whether the billing address matches the cardholder's address. This method requires the Card Verification Value (CVV) code, usually found on the back of your credit card, and can help businesses keep fraudsters at a distance.