Verification and identification methods are necessary to prevent e-commerce fraud
Fraud is exploding at an alarming rate – and the consequences of an attack can have a significant impact on your company’s bottom line. Online merchants lost an average of 8% of their annual revenue to fraud in 2017, according to Javelin Strategy & Research. With such heavy financial losses at stake, fraud prevention has become a critical need for e-commerce companies. Retailers are struggling, moreover, to strike a delicate balance between shutting down increasingly sophisticated fraudsters and driving away good customers with burdensome requirements.
Some 30% of transactions declined due to suspected fraud are legitimate, reports CardNotPresent.com, causing $118 billion in lost sales every year according to Javelin Strategy & Research. And behind every false positive is a potentially disgruntled customer: Nearly six out of 10 consumers said they will shop less or never return to a merchant who blocks their transaction, Javelin reports.
The bottom line is that consumers demand online transactions that are quick, safe and convenient – and they won’t put up with orders that are wrongly declined.
How to find rock-solid protection
Manually sleuthing each risky order is time-consuming and ineffective – and simply relying on merchant account providers to flag questionable transactions risks allowing more than a few criminals to slip through.
E-commerce fraud solutions can help retailers combat cybercrime while satisfying customers with a smooth online experience. But with so many choices on the market, how do you choose a solution that offers the protection you need?
Answer: Best-in-class fraud and identity management solutions will quickly and effectively answer these six questions:
- Is the person who they say they are?
- Could this identity be fabricated or manipulated for the purposes of hiding fraudulent behavior?
- Have any of these devices or identity elements been associated with high velocity transactions?
- Is the device, identity or online behavior associated with this transaction suspicious?
- Does the identity pose risks that require a deeper manual review?
- Is the identity being used suspicious?
A comprehensive fraud solution
TransUnion’s IDVisionsm answers these critical questions in real time. It stands out from other fraud and identity-theft management products through the quality of data upon which it relies and a contextual analysis of that information – plus its ability to provide the tools necessary to prevent losses in a single suite. Its capabilities include:
- Identity verification and authentication, which helps companies determine if people are who they say they are by capturing hundreds of signals at the start of online transactions. Its digital verification tool detects if an associated device, digital footprint or online behavior is suspect, and sends instant alerts if these elements raise red flags.
- A synthetic fraud model, which flags suspicious behaviors designed to identify whether an identity is fabricated or manipulated to hide fraudulent behavior.
- The Fraud Prevention Exchange, which detects, in real time, if select transactional elements have been associated with high-velocity credit applications or related fraudulent behaviors across TransUnion’s expansive network of customers.
IDVision relies on robust data assets not offered by other sources and applies advanced algorithms that link, interpret and analyze information to uncover oddities and patterns of risk. You receive valuable alerts with actionable scores, enabling you to stop fraud before losses occur.
Most identity management solutions focus on linking supplied information to an identity, but struggle to determine if that identity is compromised or even real. IDVision takes this vital extra step. Besides combating fraud, the tool also helps you reduce false positives by delivering a holistic picture of good consumers, including their digital behavior and transactions. These security checks can run in the background, so you don’t have to choose between vigilance and an exceptional customer experience.
IDVision: The right tool
The right tool must answer all six questions above and accomplish three goals:
- Lower the average 8% of revenue merchants lose to fraud
- Slash the rate of false positives
- Reduce the number of shopping carts that are abandoned due to onerous security procedures during check-out
TransUnion IDVision does all of these and more. To learn how IDVision fits into your fraud prevention program, visit the IDVision information page.