A fraud prevention provider is a company that identifies fraudulent e-commerce transactions, otherwise known as card-not-present transactions that result in lost revenue and charge backs.
It helps businesses catch people trying to make purchases with stolen cards, people who use their cards legitimately to make payment then later file a charge back (‘friendly fraud’ charge back cheaters) and organized account takeover attacks
The Association of Certified Fraud Examiners notifies that almost half of all small businesses fall prey to fraud. There are many types of online store fraud that fall into two major categories.
One is account takeover. This happens through phishing schemes where hackers can get into customer accounts and perform tasks like emailing them to provide personal account details.
The other is identity theft where someone steals usernames, credit card details, passwords and other personal details. Gladly, businesses can prevent this through fraud prevention services.
Here are some tips to help you find a reliable one.
Understand What The Fraud Prevention Company Offers
To settle for a fraud service provider, you need to understand what service plans they have. Does it fit the level of control you want? Different companies offer different plans that allow you to either have some level of control or be completely hands off.
You define the rules and fish for a company that fits your rules. Therefore, find a vendor that will customize their rules to match your risk tolerance and business policies.
Know What They Analyze
There are various data sources available to help with making risk decisions. Get to know how the service incorporates proxy detection, IP geolocation, charge back blacklists, social graphs, address, phone and email verification as well as issuing-bank data.
You need to know what is being monitored and how it matches what you’re looking for. Furthermore, get to know how often they add new data sources.
Importantly also, know if it will be integrated with your shopping cart. This is because you want seamless data sharing with the provider on your orders.
Know The Platforms The Vendor Supports And Partners With
It’s important to find out which channels the service supports. This will help you know if there are other card-not-present transactions you need to support and which ones you cannot.
Gauge what they support against the channels you allow and get to know what it will take for you to submit data into the system for the offline channels. Moreover, know what coding and plugins are necessary to install, if any, and the requirements needed for access.
Finally, find out what guarantee they offer. Some will provide insurance or offer charge back guarantees. This means that if you approve a transaction that later turns out bad, you’re partially or fully covered for your losses.
There are many fraud prevention service providers but not as many that will offer credible and reliable services. Some credible sites include Kount, 41st Parameter, MaxMind, LexisNexis, Risk field, Signifyd and ThreatMetrix, among others.
To qualify a service provider for your company, check what they offer against the above-listed parameters. Most importantly too, check the legal implications and terms, especially on the guarantee and how much the service will cost you.
You want to hire a company that can cover the risk associated with fraud for your business, therefore, know what your business needs and go after it.