Fraud management tools have several benefits, according to a whitepaper by FirstData.
For example, fraud management tools allow merchants to quickly adjust their scoring and resolution parameters in order to optimize results for their ever-changing business needs; they reduce staff time spent on manual order reviews; they can allow a company to stay up to date with the latest fraud protection tactics; and they can reduce chargeback costs.
According to a recent LexisNexis study, merchants are beginning to focus on adopting fraud-fighting technologies, such as device fingerprinting, IP geolocation, automated transaction scoring, and real-time transaction-tracking tools. However, there is still room for improvement for larger ecommerce companies.
The LexisNexis study found that 15% of large ecommerce companies use device ID/device finger-printing solutions, 22% use automated transaction scoring, 29% use IP geolocations, 30% use real-time transaction trafficking tools, 32% use rules-based filters, 38% have transaction/customer profile databases, 54% have card-verification tools (such as CVC or CVV1), and 55% use transaction verification/validation services.
According to the study, several of the above mentioned tools “are particularly” useful when applied to mobile shopping channels as well.
When merchants who sell internationally were asked in the LexisNexis study to name their most effective tools for controlling fraud, the top-five responses were:
- Card verification value software (32%)
- Pin/signature authentication software (31%)
- Transaction verification/transaction validation services (27%)
- Authentication of transaction/3-D secure tools (24%)
- Check verification services (21%)
In addition, 18% named address verification services and 18% cited IP geolocation services.