Fighting Fire with Fire

  • David Rawling, Global Product Director at Sage X3

  • 17.12.2015 11:53 am

Growing businesses in the UK lost nearly £18 billion to fraud, at an average of £3,450 per business last year. With every pound lost to fraud representing a tangible loss to businesses, it’s easy to see why companies are so eager to prevent e-commerce fraud at all costs. The best way to secure your business from fraud may not necessarily be the most obvious method.

Most companies assume that they should set up rigid security policies to protect their business as rigorously as possible. However, this approach comes at a price that is considerably higher than most companies can afford.

Rolling with the punches

Rigid security systems and rules aren’t going to be enough to protect your company from fraudulent transactions. Fraudsters are quick, responsive and creative about their attempts to steal, and you need to stay flexible in order to keep up. You can’t set up your fraud policies once and walk away, you have to constantly reassess your way of dealing with fraud, taking on new challenges that arise in the best way for your business.

Modern e-commerce fraud takes place within a context of an organised, professional and sophisticated criminal ecosystem, and online retailers need to understand that and take it into account when it comes to fraud prevention. This means implementing a strong business management system that easily pairs with a reliable payments partner, allowing you a comprehensive, transparent view of your business.

Staying up to date with the latest developments within the environment of fraud and fraudsters, being aware of the methods these crooks use to commit fraud and to avoid detection can also help you stay one step ahead.

Using technology to fight technology

While it’s true that the criminals have easy access to new software and tools, it’s also true that modern fraud fighting has evolved rapidly in recent years, starting from basic fraud tools provided by your payments partner. Most payment service providers offer address verification system checks for example, vetting the numbers in the billing address of the card against the address at which the card is registered. Another fraud blocker is the more traditional card verification code check asking for the three or four digit authentication code on the back of credit or debit cards, as is the 3D Secure feature that works like an online version of chip-and-PIN, where instead of a PIN number, a user-generated password is required. It aims to reduce the possibility of fraudulent card use by authenticating the cardholder at the actual time of the transaction, reducing your exposure to disputed transactions and charge-backs of this type.

Transparency is key – integrating business operations

As your business continues to grow, staying on top of everything can be a constant challenge. A robust business management solution can help align your business goals and break down silos, improving productivity, increasing efficiencies, decreasing costs and streamlining processes—including the data generated from your ecommerce payment strategy.

Integrating your business management solution with payments can also give your business a greater degree of visibility as to what orders your website is actually receiving. This visibility is strengthened by the fact that payment transactions are all viewed in one place in real time. With this information at your fingertips, your business can easily determine what kinds of orders are being received based on the time of year. In addition, this data can be accessed by anyone within the company, from sales staff to management, allowing for greater transparency in operations.

The bigger picture

There are some very powerful fraud prevention tools in the market today, from behavioural analytics, which can trace fraudsters’ movements on your site and flag them as not being the actions of a genuine customer, to cyber intelligence, which involves peeling away layers of the carefully fabricated mask from the criminal’s virtual face,. Keep up with the latest tech and solutions, analyse each one from the perspective of growth, as well as loss avoidance, and make sure that you always have the best. But these high-tech solutions are only useful within an organisation that is transparent and streamlined in its operations, with every element, from the payment system to the business management solution are in synch. Ultimately, it all starts with aligning your payment system with the rest of your business operations.

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