Experiences in Managing e-commerce Fraud?

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Alison Harrell
5 years ago
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1 Experiences in Managing e-commerce Fraud?

2 Where our input is from? 52,000 businesses worldwide trust Ogone to manage, secure and collect their online and mobile payments 137 Mo transactions processed in 2012 (worth 16.6 Bn) new merchants per month 200+ acquiring partners and banks 200+ resellers, industry partners and shopping carts softwares 20+ white-labels 85+ international, local and alternative payment methods

3 Worldwide

4 Trends & Experiences Supporting Merchant 360 degrees

5 Trends & Experiences

6 A few observations

7 Is fraud a priority elsewhere? Fraud rate NL : 0.4% Fraud rate FR : 1.4% Fraud rate UK : 0.8% Fraud rate DE : 0.6% Fraud rate BE : 0.6% Analysis done through 200+ merchants from all size, many industries and various gateway services.

8 Optimized conversion Think global, Act local ideal in NL ELV strong in DE BC/Mistercash in BE Credit Cards in BE, FR, UK PayPal in UK & DE 3-D S discrepancies AVS in UK Chargeback risk?

9 3-D Secure adoption* 60% 62% 69% 18% 32% 21% 21% 37% BE NL FR DE CH SP IT Total Analysis done through 12 M+ transactions during the month of October 2013 (includes all payment methods)

10 Supporting merchants 360 degrees

11 What is Merchant Cost of Fraud? Sound understanding of direct & indirect costs Evolution Monitoring Direct financial costs Missed revenues Prevention costs

12 Data is key Card data Personal data Billing/Shipping data Shopping basket data Travel related data

13 Get a better understanding of fraud patterns and caracteristics Affiliate fraud Social engineering Friendly fraud Card country Departure-Destination Average amount IP country Time to departure + +combination of all the above

14 Rules & Profiling Smart authentication (3-D Secure, AVS) Real time Behavior mapping Use cross-merchant databases Device Fingerprinting Blacklists, greylists, whitelists Etc.

15 Mobile top up provider Propose recharge of 25 European mobile phone networks transactions per month Triple digit yearly growth since 2010

16 Key Challenges Larger volumes & better visibility led to more fraud threats International development. First stop: France More fraud attempts, less conversion Narrowed margins

17 Situation before 30% of orders were blocked Fraud rate above 1%

18 Solutions Implementation of a second layer of protection Loosen their fraud rules and velocity checks Use of the latest technologies such as Device Fingerprinting Better profiling of Positive and Negative customers Outsource the reviewing of suspicious transactions

19 After 2 months

20 Air India Your Palace in the Sky Flag carrier of India Founded 15 October Aircraft 60 Domestic destinations 31 International destinations 19 Countries

21 Key Challenges Two brands Merger Air India and Indian Airlines Bottleneck in Scalability of Manual Review Team Awareness Cleaner fraud with IP, Card country and others Matching Travel agent VS Fraudster

22 Situation before Business discontinuity threatens 90% of orders were manually reviewed Time taken for review was 8 hours

01 % Lead time for manual review reduced

23 After 6 months Charge back rates fell from 0.34% to 0.01 % Lead time for manual review reduced 8 hours Need to review data from different sources 2 hours Information available on 1 single screen Reduced time between booking & flight For international & domestic flights From 72 hours Till Last Minute REVIEW 90% REVIEW 3-5%

24 Conclusion Fraud losses were drastically reduced Increase in ecommerce sales Order acceptance up to 35% Reduced Cost and time taken for manual review Profiled Positive and Negative Customers New routes were adopted easily

25 Thank you