Online retailers in the US are losing billions of dollars every year, thanks to the credit card frauds taking place.
Credit card frauds aren’t that harsh on the brick and mortar businesses. For offline retailers, usually the card issuers – Banks, VISA, and MasterCard – take the responsibility of covering the losses due to due to counterfeit cards.
But online retailers don’t come under the same umbrella. They are left on their own. it means that online retailers – whether big or small – have to reimburse their customer, whose credit card number was used to make the fraudulent purchase from their website. Moreover, online-only retailers like Amazon and EBay falls in the highest risk zone of something that is called “everything bought fraudulently”.
It has been observed that most of the credit card frauds are mobile-driven. Credit card frauds made using mobile devices cost merchants more than frauds made on websites. Mobile frauds cost merchants almost thrice the amount the victim customer has spent, specifically $3.34 for every dollars of fraudulent activity.
In the upcoming years, online fraud is expected to grow more, especially in the U.S. Our country might have introduced cards with microchips called EMVs this year, but these cards are better at preventing instore frauds. They can’t prevent online fraud, where card numbers will still be used.
Consequences of Online Credit Card Frauds
In 2014, the overall online credit card frauds cost retailers $32 billion. This amount is 38% more than the losses suffered in 2013. Earlier in the year 2015, 42% of merchants with an online presence reported an increase in fraud.
But the “real” impact goes beyond the monetary losses.
Retailers spend loads of cash on systems that can manual fagging fraud. Manual fagging is done by real human beings, who go through suspicious purchases and make sure they’re legitimate. This process takes time, which can lead to a delay in the delivery of products to consumers.
Not only that, a customer experience with the retailer can also be harmed by these prevention methods. When a legitimate customer gets accused of fraud, there are going to be negative consequences on the retailer-customer relations.
Last but not the least, tackling credit card fraud takes a retailer’s precious time and energy, which could have been used in other areas of the business.
How to Combat Online Credit Card Frauds
Retailers are wasting their retailing on dealing with frauds. This hampers their growth and distract them from their core expertise. The best solution to handle frauds is to introduce technology and data in the picture. Our web- FRAUDgate 2.0™ is one such example of a third-party solution that is helping retailers combat the credit card frauds.
Our web-FRAUDgate is a real-time scoring engine that evaluates the risk level of transaction data based on the retailer’s customized parameters, and also includes a consolidated review interface for further identification and analysis of transaction risk.
The API have comes with tools, which include high risk IPs, IP geo-location, collaborative networks and velocity checks. The solution provides merchants & retailers ultimate access to fraud score as well as ID validation risk analysis, both at the same time.