Fraud is a big problem for ecommerce merchants, costing them lost merchandise and money. But it’s also difficult to pin down exactly which vulnerability or operation led to a particular fraudulent chargeback. Best fraud detection online is why a great online fraud detection system requires a combination of many different tools and techniques. The best online fraud detection system is one that integrates with all your other business processes and systems, including those that help you keep track of your customers. The system should be able to handle high volumes of transactions and meet compliance standards for different industries.
How to detect fraud using data?
A good tip line is essential for catching fraudsters in action. Make sure your whistleblower system is accessible to everyone in your company, not just employees: Offer multiple ways for workers to report suspicious activity—via email, phone, text, or web. When people have multiple options for reporting, they’re more likely to use the system.
The best online fraud detection tools are ones that prioritize behavioural and transactional analytics. For example, look for solutions that monitor shopping habits and flag unusual patterns or anomalies. Also, make sure your online fraud detection solution has geolocation capabilities that let you track a buyer’s IP address and trace their location. This is important in cases where fraudsters are using VPNs to hide their true locations.
A reliable solution for online fraud detection should also include CVV (card verification value) checking. This is the three- or four-digit number printed on a credit card that helps confirm that a person is its authorized owner. Under Payment Card Industry (PCI) compliance rules, merchants can’t store CVV information, so it is nearly impossible for hackers to steal it unless they get physical access to the credit card.