The Changing Landscape of Online Fraud Prevention
A Q&A with Jeff Liesendahl, President of Accertify
What trends are you seeing in e-commerce fraud prevention?
Retailers are realizing that the level of e-commerce fraud losses that they have considered "acceptable" in the past is not acceptable at all. That's especially true in the current economic environment. For many merchants, e-commerce sales are a bright spot right now and they doing everything possible to maximize online revenues and improve the web shopping experience for consumers. But at the same time, they have to make more efficient use of limited resources. They have to do more with less and eliminate operational costs. They are focused on initiatives with quick ROIs. Preventing online credit card fraud prevention is a critical area to address because they can achieve significant cost reductions almost immediately. It's about more than just reducing fraud rates – it's about reducing manual review and order rejection rates and increasing analysts' productivity and accuracy.
What are retailers doing to reduce their cost of fraud?
Several things. First, they are strengthening their defenses by applying more automation and new tools and technologies in their fraud prevention programs. Second, they are moving away from "piecemeal" solutions and taking an integrated, platform-based approach that is quicker to implement and provides results in a matter of weeks. Third, they are empowering their fraud prevention teams to take control of the process. Because criminals are always inventing new scams, merchants have to be fast and nimble at fraud-fighting. That means choosing flexible solutions that aren't dependent on any single anti-fraud technology and that can be easily modified without waiting for help from an IT department. Additionally, they are looking at hosted and outsourced options in order to address capacity, fixed-cost and personnel issues.
How are they addressing the customer experience issue?
Consumers expect to be able to use their credit cards with ease, and they expect prompt shipment or they'll shop elsewhere. When fraud prevention analysts are overwhelmed by suspicious-looking, incoming orders, order-processing is impacted and the customer relationship can be damaged. So merchants are taking steps to eliminate the manual review logjam by improving their data management capabilities and by leveraging the latest case management and automated workflow functionality.
What is an acceptable level of fraud?
Whatever losses a merchant is currently experiencing, they can significantly reduce them. One of our customers, Southwest Airlines, had a fraud rate below the industry norm, but still believed they could do better. Accertify's Interceptas™ platform enabled the airline to cut its fraud rate and fraud-related revenue losses by more than 50 percent in only four months, a single charge-back cycle. Southwest also reduced fraud-related operating costs through productivity gains. The airline was very pleased with the fast ROI they achieved with Interceptas. And as criminals failed to succeed, the airline is now seeing fewer fraud attempts and the fraud rate has continued to improve. And that type of documented reduction in fraud losses and ROI is typical of our customers' results.
Why do you think merchants have chosen Accertify's Interceptas platform?
Accertify® is aligned with their objectives. Our Interceptas platform integrates all of the best practices, tools and components merchants need for a strong defense. Accertify customers are experiencing improved success at screening orders on the front-end, enabling them to identify more suspicious orders. They are spending less time validating good orders, which keeps their analysts focused on weeding out high-risk transactions. They are manually reviewing fewer orders and completing the reviews in less time. One reason they're able to do this is that Interceptas helps them manage large volumes of transaction data more efficiently and effectively. Also, Interceptas addresses the entire process of fighting fraud with a unique end-to-end approach that closes the gaps that fraudsters slip through. User-friendliness is another key factor. Accertify's user interface and fraud dashboard are very simple to use and customize. Interceptas allows the merchant's fraud team to modify business rules and plug in new tools quickly, without reliance on internal IT resources, so they're in control and can react quickly to the ever-changing fraud environment.
Why is data management so important?
Effective fraud prevention begins with getting access to all relevant transaction data. This may sound obvious but it's a real challenge for merchants with limited IT resources. Interceptas was designed to accept unlimited data files in any format and any size, so that barrier is removed. With Interceptas, merchants are able to access significantly more data elements in the screening process. They can add and change business rules as needed. Not only is this approach extremely effective in preventing card-not-present fraud, Interceptas can be used to help merchants prevent merchandise return fraud as well.
What do your customers have to look forward to?
While the marketplace response to Interceptas has been very positive, we will continue to strengthen our platform with enhanced features and functionality. We have expanded our partnerships with other companies in the fraud-fighting community to better serve customers and simplify their deployment of new products and services. Accertify now provides seamless access to a wide variety of data validation and verification services within our Interceptas platform. And we are expanding our relationships with leading payment processors to eliminate the need for multiple integrations. We are constantly looking to our customers for feedback and they can expect additional enhancements on a regular basis in the future.