DO NOT LIVE: Safeguarding your e-commerce payments – Best practices
Saturday, 27 Sep, 2015
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Masha Cilliers, Principal Consultant of Payment Options Ltd offers fraud prevention solutions for online travel retailers.
Different e-commerce sectors are faced with different problems when managing fraud but there are also similar issues too. Research shows three main aspects come through:
- There are differences: transactions may involve the immediate delivery of goods while some are delivered later. Some goods may be ‘claimed’ several months after a transaction is completed
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- Similarities do occur: it is possible to predict fraudulent behaviour but fraudsters are getting more technology savvy
- Fraudsters don’t discriminate – they are more than willing to defraud all sectors! They often exchange information about their experiences across different industries!
Let’s review some of the key fraud screen providers, the trends they are seeing and best practices to prevent those attacks.
One provider notes that there is a growth of ‘clean fraud’, which means the well prepared fraudster has access to all the correct data about CVV, IP and delivery address. They may also be ‘scrumpin’: using a real customer’s PC as a proxy hijacking it with the use of malware and botnets. Fraudsters are now often ‘gaming’ the retailer’s system to identify the settings and the limitations of its fraud prevention system. Traditional fraud management tools are not always sufficient to address these issues.
Additionally, the retailers should check the ‘packet device signature’ – a device fingerprint combined with the browser fingerprint. The device could also be interrogated to see if anything else may be controlling it and if it is part of a botnet. Success in detecting this may be down to a multi-faceted approach using a layered set of tools where different parameters are pooled to give the full picture.
Another provider is seeing a growing use of ‘synthetic identities’ being developed by scammers. The traditional rules and tools do not realise that these type of transactions may be fraudulent. A solution here would be to link the orders and its attributes and cross reference for similarities in online transactions globally. There are also some effective new attributes that can be utilised such as age and user history of email addresses and social network profiling.
Furthermore, one provider acknowledges that real time screening is essential but it is not necessarily enough to see the full picture. A retailer may be unlucky to be at the start of a fraudulent sting and as such will not be able to see the transaction components elsewhere. The provider recommends that re-screening orders a few hours to up to three days after they were made gives a clearer picture. In many cases delivery of purchased goods is not immediate so re-screening can be implemented into the distribution process without impacting customer service delivery.
Finally, data sharing and information exchange between the retailers is essential, and I am happy to see that some providers are making it their goal to establish such ‘clubs’ and ‘exchanges’. After all, fraudsters operate in a sharing community way on a global scale, so it is high time retailers and other online ecommerce merchants do.
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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