There is good news and bad news for online enterprises. The good news is that by the year 2028, global e-commerce will be predicted to exceed US$2 trillion. Is that terrible news? A rise in e-commerce fraud will coincide with this increase in online sales.
By the year 2027, it's anticipated that internet retailers will have spent over $40 billion on fraud. Online fraud opportunities for cybercriminals and unethical customers are expanding along with the increasing popularity of online purchasing.
You must defend yourself against online scammers if you run or own an online business, and e-commerce fraud prevention software cost is a worthy investment since they can steal from you, ruin your online reputation, alienate your consumers, tarnish your brand, and reduce your sales.
Mobile devices like mobile phones, laptops, tablets, desktop computers, game consoles, and even the metaverse are frequently used for e-commerce transactions. When discussing fraud, we refer to unlawful deception meant to produce monetary or personal benefit. A single fraudster, a criminal organization, or an AI bot are often the perpetrators of e-commerce fraud, which is also done to benefit their own financial or personal interests.
Regarding e-commerce fraud, keep in mind two things:
An online business is the intended victim, and the trick is meant to go unnoticed.
Why Does Online Shopping Fraud Occur?
Ease: Modern consumers and the internet make it simple for scammers to obtain user credentials and stolen credit card information to seize control of legitimate users' accounts. Consumers have been kept safe by security measures. Still, virtual private network operator NordVPN discovered that more than six million stolen credit cards are being sold on the dark web for an average of over $7 each
Anonymity: Payment fraud is also common because it is carried out anonymously. Fraudsters don't need to enter a business, speak to anyone, or take a chance to be seen on surveillance cameras. All they require to operate covertly from any location at any time of day is a smartphone, tablet, or laptop. Online scammers frequently rent post office boxes and set up phony email addresses using aliases that conceal any information that could be used to identify them.
Evasion: E-commerce fraudsters know that many organizations find it difficult to investigate fraud and frequently overlook the microtransactions and international e-commerce fraud that have become so common. This gives criminals the chance to practice their techniques before trying high-value fraud.
How to Spot E-commerce Fraud
There are several techniques for an online firm to identify e-commerce fraud. Just keep in mind that e-commerce fraud is only as successful as the competence and creativity of the perpetrators. Online thieves step up their game and devise clever ways to scam their prey as organizations strengthen their defenses against online criminal activity.
Erroneous Order Information
The city and ZIP code entered are incompatible. Or the customer's IP address and email address don't match.
Order That Is Larger Than Usual
The order is far bigger than what your customer usually purchases. Additional warning signs include ordering many items with the same SKU and expedited shipment since the criminal needs the order quickly to avoid being detected.
Unusual Place
Your consumer typically purchases from a North American IP address but suddenly, for instance, buys from a Nigerian IP address.
Different Shipping Addresses
The buyer uses one billing address to make several purchases while the products are shipped to other addresses.
Numerous Transactions Occur Quickly
The fraudster makes several purchases quickly, and the time is not a holiday.
several orders from different credit cards
Someone makes numerous purchases (either all at once or spread out over a longer period) using various credit cards.
Several Consecutive Refused Transactions
Sincere buyers make mistakes, after all, so the buyer makes not just one or two efforts but also four, five, six, seven, or even eight times before successfully entering the right card number, expiration date, and security code.
Information is power.
You can take the necessary steps and important actions to stop fraud in your online store once you comprehend what e-commerce fraud is, why it is so common, and how to detect it.
E-commerce fraud prevention software can help to identify fraudulent transactions through IP geolocation, authenticate email addresses, perform device fingerprinting, and check addresses when it comes to identifying and combating online fraud. It offers many features, including safeguards against new account fraud and account takeover, chargeback guarantees, automatic rejection of high-risk transactions, and more. Offer further knowledge in managing loyalty fraud, preventing policy misuse, using automated decision-making, and manually reviewing transactions.
Using e-commerce fraud prevention software that identifies some of the trickiest fraud behaviors, suspicious orders are marked for contextual secondary reviews.
The information acquired from such contextual reviews is then used by e-commerce fraud protection software to improve the ability of your system to discriminate between legitimate transactions and fraud. As your system processes more transactions for the client, it will be easier to identify "good" transactions, which will raise their approval rates and income.
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