PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Merchants Fight Online Fraud, But Leave Some Customers Unhappy

By Raymond Pucci
April 19, 2018
in Analysts Coverage
0
4
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Email Phishing in 2020: Fake Login Pages and Credential Theft a Constant Threat for the Financial Industry

Email Phishing in 2020: Fake Login Pages and Credential Theft a Constant Threat for the Financial Industry

Dynamic fraud detection methods, such as machine learning algorithms, are giving merchants the means to beat back bogus online sales orders. As the following article reports, while advanced fraud fighting methods are highly successful, there are sometimes legitimate sales that get rejected, leading to unhappy shoppers.

When people shop online at retailers like Macy’s Inc. and Finish Line Inc., their visits are tracked and shared with an outside firm that scores their behavior and decides whether to approve or deny purchases. Shoppers who exhibit behavior that such scoring firms often associate with fraud, such as buying without checking the return policy or paying for the fastest shipping option, have a higher chance of getting declined. Sometimes they never find out why their transactions are canceled or who made the call.

Behind these decisions is a group of firms hired by retailers to weed out fraudulent online customers. They determine which indicators correlate with fraud and then evaluate shoppers based on hundreds of data points. A Tel Aviv-based company called Riskified works with Macy’s and Finish Line. Its rivals include fellow startups like Signifyd and Forter, as well as players like CyberSource, which was acquired by Visa Inc. in 2010, and Accertify, which American Express Inc. bought the same year.

Online shopping has created new challenges for retailers trying to combat fraud, such as people using a stolen card or falsely reporting a transaction as fraudulent. Credit-card companies typically cover the cost of unauthorized purchases in stores. But with online transactions, retailers are usually on the hook when a customer reports a fraudulent charge.

Merchants finally have advanced measures to combat online fraud which has become a significant problem.  Many fraud detection firms, including those mentioned in the article, have delivered highly effective fraud identification results, so these measures should continue unabated. However, a problem occurs when there is a lack of communication between merchant and customer, when a legitimate sale has been rejected—or as the industry calls it—a false positive. Rather than be secretive about it, merchants should reach out to customers and let them know what is happening. Are legal departments standing in the way? If these consumer issues persist, regulators could potentially step in to introduce disclosure requirements. But the bigger picture is that merchants and their security vendors should continue to be proactive in countering e-commerce fraud, as the fraudsters will not go away.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

Read the quoted story here

4
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: Fraud Risk and AnalyticsMerchants

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    digital cards

    Beyond Plastic: Why Digital Cards Are the Future of Credit

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025
    Rewire Acquires Imagen, Looking at Prepaid Cards for Migrant Workers

    Smells Like Team Spirit: What Makes Cobranded Credit Cards Work

    July 3, 2025
    uk banking outages

    New Continuous Strategies for Battling Account Takeovers

    July 2, 2025
    Fraud Monitoring

    What to Expect When Nacha’s Fraud Monitoring Rules Take Effect

    July 1, 2025
    payments

    Don’t Just React to What’s Next in Payments—Anticipate It

    June 30, 2025
    consumer debit

    As Payment Types Proliferate, Debit Cards Still Go Strong

    June 26, 2025
    Embedded Payments

    How Embedded Payments Is Optimizing the Expense Management Process

    June 25, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result