Tools Used in Online Fraud Prevention
Antifraud covers a wide range of tasks. In e-commerce transactions, you need controls that prevent, or at least reduce, fraudulent activity. Here are some of the most common methods and platforms used for that purpose.
Payment gateway fraud tools
All payment gateways include basic fraud controls such as 3D Secure, AVS, and CVV checks. Some gateways also include more advanced controls, such as address verification or velocity checks.
Data enrichment services
Data enrichment services help fill gaps in the data you have about your customers. They can provide information about a customer’s name, address, phone number, email address, social media profiles, and more.
Machine learning
Machine learning is a type of artificial intelligence used to detect patterns in data automatically. It can help identify anomalies in customer behavior, such as unusually high order values or unusually high shipping costs.
Chargeback prevention
Chargebacks happen when a customer disputes a charge with their credit card issuer. Chargeback prevention platforms can help you identify and flag potential chargebacks automatically, so you can act before they happen.
Fraud detection
There are many different fraud detection platforms available, like FraudLabs and Maxmind. These platforms can help you flag orders that are likely to be fraudulent, so they can be reviewed manually.
Fraud prevention
Fraud prevention platforms can help stop fraud before it happens. They do this by sharing data about known fraudsters with other businesses.
Transaction Monitoring
Transaction monitoring is the process of continuously checking all transactions for fraud. It can be done manually or with automated platforms. Automated transaction monitoring platforms can flag potential fraud cases for manual review.
Case Management Tools
Each transaction flagged as potential fraud needs to be tracked in a system. Investigators reviewing those transactions need access to all relevant data, and they need to be able to collaborate or escalate to domain experts. If law enforcement becomes involved, the platform should be able to provide the full case file to support the investigation.
Conclusion
The most effective way to prevent fraud is to use a combination of these platforms. Using multiple methods gives you a clearer view of customer behavior and reduces the chance of fraud.
Frequently asked questions
What tools are used to prevent online payment fraud?
Online payment fraud prevention can use payment gateway controls, data enrichment services, machine learning, chargeback prevention platforms, fraud detection platforms, fraud prevention platforms, transaction monitoring and case management tools. Combining these methods gives businesses a clearer view of customer behavior and reduces the chance of fraud.
What does transaction monitoring do?
Transaction monitoring checks transactions continuously for fraud. Businesses can do this manually or use automated platforms, which can flag potential fraud cases for manual review.
What should a fraud case management tool do?
A fraud case management tool should track each transaction flagged as potential fraud and give investigators access to relevant data. It should also support collaboration and escalation to domain experts, and provide the full case file if law enforcement becomes involved.
