The development of e-commerce has been exceptional for home owners on the web, but it has also allowed them to increase their attention to fraud.
Authorities say the economic downturn in 2023 will end with an increase in expense fraud. The pandemic has been the main reason for the increase in web searches over the years.
Let’s dive deeper into this information to learn more about the fraud reduction strategies you need to employ this year.
Types of e-commerce fraud
Before we dive deeper into understanding more about fraud reduction strategies, take a moment to learn more about the common types of e-commerce fraud.
Cost fraud: Price fraud occurs when a fraudster uses someone else’s credit or debit card to buy and sell items for their own extra profit. Because of this, many e-commerce failures occur.
Account Takeover (ATO): This happens when a scammer uses stolen referrals to open people’s reports and gain access to their platform. Online attackers steal referrals and this is considered “account takeover”.
Pleasant Deception: We’ve mentioned it before, and we have to say, there’s nothing great about an enjoyable deception. Some call it “chargeback or abuse fraud,” and it’s a type of e-commerce scam that involves a fraudster illegally demanding a refund.
Affiliate Scam: Scammers use illegal jobs to earn commissions through affiliate marketing programs. Although there are many conditions for blocking, it can still happen. Some of the most common types of affiliate scams include cost-per-click campaigns, cost-per-sale proposals, and more. This kind of scam can happen in any number of ways, from freeing up a site to creating a spam link of your choice and more.
Synthetic Identity Theft: This is a type of fraud that involves obtaining real information about people, including their start time, government ID, and much more. It may not be pleasant and when this happens, many other fraudulent injuries can occur.
While we have mentioned a lot of e-commerce scams, there are plenty of them out there. Every year, new types of fraud may appear that have not yet been discovered. We cannot know them, but the best stage we are capable of reaching is their use and limitation.
8 eCommerce Strategies You Can Use to Prevent Fraud This Year
1. Automated Decision Making Using Artificial Intelligence (AI) and Machine Learning (ML)
Artificial intelligence has indeed turned into an effective weapon against fraudsters. ML patterns are an integral part of artificial intelligence technologies and are used to analyze knowledge and detect irregular behavior. Automating decision-making operations actually makes it easier for you to make smarter decisions, considering your AI technologies are being used as a fraud analyst.
When you incorporate AI-based technology with ID cards, vendors can create their own rules and provide a much better solution to reducing e-commerce fraud. In addition, it reduces the requirement for manual evaluation, increases popularity fees and creates better results for the organization.
2. Integrate Multi-Factor Authentication (MFA)
MFA is a great way to identify fraud. In fact, it blocks 99.9% of automated cyber attacks. For MFA to work, it uses significantly more than two types of authentication to complete a transaction. It can be a code that provides a time-limited code via SMS, email or using fingerprints and skin recognition.
MFA is excellent for reducing the chance of account takeover and ID theft. Implementing an authentication method in your business is a great way to prevent attacks. Overall, many web search platforms require customers to enter a verification code to verify purchases.
In order to incorporate MFA into your company’s proof method, you need to know what transactions your company approves and the level of probability associated with them. In this case, a high-value transaction may be much more likely to be targeted by fraudsters than a low-value transaction.
Before you ask visitors to verify, you can teach them why you’re doing it. This is for the good of your company and to save it from unnecessary attacks.
3. Keep your software up to date
Material Management System (CMS)
Jacks on your website, especially shopping cart software
Themes for your website
In this way, you play the game safely and you may not give cheaters room for possible attacks. All things considered, if you don’t keep your app up to date, you’re also giving room for bugs to occur. This can be a free attack for fraudsters.
4. Request a Credit Verification Value (CVV)
You have a rule on the trunk of your payment card that no one has to see you. It’s completely safe to transact this way because fraudsters can’t get to your credit card and see the CVV until they physically steal it from you.
CVVs are possibly three- or four-digit security codes that always act as second-factor authentication when purchasing on the web. By requiring online customers to supply a quantity of CVVs, you provide them with an additional layer of protection and reduce the potential for e-commerce fraud.
5. Fraudulent transactions work against
you simply because they damage your company’s reputation. KYC is several techniques used to identify and verify a customer or customer. KYC operations are typically used by e-commerce vendors to block fraud.
In addition, here are some techniques that e-commerce vendors can use KYC to stop fraud:
Customer ID Verification: Requiring customers to offer their IDs and verifying their consumer’s contact and contact details, reducing the chance of fraud and the ability of stolen identities to make purchases.
Assessment for almost all unsafe customers: This screens customers to see if they have any history of fraudulent purchases.
Pay attention to customer behavior: Check what kinds of purchases your customer makes. If it’s a big one from new places, it can be described as a red banner that you should notice.
They include multi-factor authentication: As we mentioned earlier, they include the MFA method because it helps make it harder for fraudsters to carry out their transactions.
Always confirming a consumer’s identity is a great idea to prevent unauthorized transactions and reduce the risk of fraud.
6. Compare billing and IP address
IP addresses are not necessarily described as a great identifier, but they ensure that you are in the same normal geographic area. For example, if you yourself have a customer who reveals that their billing address is from Europe, but their IP address is in United Claims, we may have a problem here.
While you may find people making purchases while on the go, you still want to call or email the customer to verify the purchase. Most recently, the government just noted that it received well over 2.8 million fraudulent studies this year.
7. Collect only the information you need from customers
It is not necessarily recommended to keep excessive amounts of information from customers. We argue that you only get the ones you will need because with more knowledge always comes more responsibility.
The best practice is to avoid collecting excessive amounts of sensitive data. This way you reduce the likelihood of exposure and as a general principle collect the information you will need and verify transactions.
Overall, the amount of knowledge you gain should only serve to verify your transaction and the need to ship the product.
8. Set limits on all total purchases
You will need to determine your store’s current revenue and collections and control over the total amount of purchases made, both in terms of items and dollar value on the account in a single day. That way, even if the scammer manages to get past some of the messages, they still won’t be able to cause much financial damage to your business.
So these limits are exceptional for your purchases and can win you a lot in the long run.
Why eCommerce prevention strategies are important to your long-term success
E-commerce strategies are a significant feature as they contribute to your long-term success. Cheating can be a rebellion and anything you can do to prevent it is always welcome.
As fraud becomes a situation of rebellion, it is more important than actually to create mandatory strategies to block it. All things considered, it only takes one time for your corporate reputation to suffer, and once you lose it, you can’t get it back.