The Key Questions to Consider When Choosing a Fraud Solution for Your Business
by Vesta E-Commerce Blog April 27, 2021Fraud solutioIn this article, learn the key questions you should consider when searching for a fraud solution for your business.
Did you know that 27% of online sales end up being fraudulent? As more and more businesses are relying on ecommerce platforms to reach their customers, fraudulent transactions are posing a significant problem to merchants in nearly vertical and market across the globe.
To protect your business and your consumers, you need a fraud prevention solution that will identify and reduce your fraud risk. In this article we’ll be covering the three key questions to consider when choosing a fraud solution for your business. Read on to learn how to safeguard your revenue.
Is Having a Fraud Solution Necessary?
Across the globe, fraud has increased significantly in the last several years. 86% of consumers report that they have been a victim of credit/debit card fraud, identity theft, or a data breach, and the 15 biggest data breaches of the past 20 years involved billions of people.
The rise in popularity of online shopping has more and more consumers purchasing online. Other services, such as utility payments, mortgage payments, car payments, and insurance payments are all often made online as well, giving potential fraudsters plenty of opportunities to steal consumer data.
The number of people affected by online fraud and the cost to small businesses should be motivation enough for you to take fraud prevention seriously.
What to Look for in a Fraud Solution
When researching fraud prevention solutions, there are certain things that you should look for and questions you should ask. Here are three questions to ask that will help you determine if a solution will be effective in eliminating your business’s fraud problem.
How Long Does Transaction and Fraud Analysis Take?
A fraud solution should be able to accurately identify the risk of a transaction and either approve or decline it in real-time as the customer is checking out. There’s a careful balance between preventing fraudulent transactions and making sure that legitimate orders are being approved. If the fraud solution takes too long to determine the legitimacy of a transaction, your customer experience is going to suffer.
Does the Fraud Solution Leverage a Wide Variety of Data?
It’s critical that the fraud solution you utilize gathers consortium data from a variety of verticals to inform the risk decisioning process. Transaction details, chargeback information, and other supporting data elements should be collected and securely stored to allow fraud analysts to see potential fraud from every possible angle—continuously improving the decisioning platform and machine learning models over time.
When deciding which fraud prevention solution is best for your business, look for one that not only pulls together a great deal of data but also organizes it and shares it with you in ways that are meaningful and allow you to take action.
Does the Fraud Solution Utilize Machine Learning?
Any effective fraud solution should utilize elements of machine learning and manual review to adapt to new fraud patterns and accurately identify fraudulent transactions. Machine learning will enable you to improve your fraud detection capabilities with every new transactions. As your business scales, your fraud solution should be able to scale alongside it and accurately adapt to the latest event and data.
First appeared on Vesta’s Blog on eCommerce Fraud.
