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How to Prevent Fraud without Compromising the Customer Experience

Banking CIO Outlook | Tuesday, September 14, 2021

As the popularity of online shopping grows, scammers are keen to exploit flaws in internet security. Certain departments inside an e-commerce organization, in particular, can render the company more prone to fraud.

Fremont, CA: Delivering a pleasant shopping experience entails more than just the purchase; it also entails the payment. Today, however, businesses are so preoccupied with the risk of fraud and assaults that the simplicity of checkout frequently suffers, leaving customers unhappy and carts abandoned. Risk-mitigation tools that are excessively strict can cause friction in the payment process. Multiple security and authentication stages, low tolerance rules, and time-consuming hurdles are leading to an increase in false rejects, with valid card-not-present (CNP) transactions being refused, owing to a suspicion of fraud. Relaxing fraud prevention procedures to allow for a more seamless shopping experience, on the other hand, exposes merchants to a considerable risk of undiscovered fraudulent transactions and a rise in chargebacks.

Communication Is Everything

As the popularity of online shopping grows, scammers are keen to exploit flaws in internet security. Certain departments inside an e-commerce organization, in particular, can render the company more prone to fraud. Consider the marketing and sales departments. In order to build better brand equity, the team may employ strategies such as giving discount coupons, which create little gaps in the business's security. As a result, the fraud team may submit all coupon inputs for manual assessment, thereby harming the consumer experience. Employees in fraud-prone sectors of a firm should be aware of the warning signs of fraud, develop preventative skills, and have a streamlined reporting process in place. To decrease risk as much as possible, it is critical that all departments collaborate well and remain in regular communication.

Use Solutions That Combine Dynamic Risk Management and Payment Processing

Choosing solutions that allow one to combine risk management capabilities within one's payment processing platform aids in providing one's customers with a flawless and fraud-free payment experience. A dynamic risk management database that uses millions of client profiles and machine learning allows one to discern between fraudulent and genuine transactions in seconds. Machine learning has emerged as a critical component in the fraud detection process, and every e-commerce company should take full use of it. Deploying a machine learning-based solution that avoids fraud while maximizing genuine transaction approvals can provide a high-quality shopping experience without sacrificing security.

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