Online businesses will say eCommerce fraud comes with the territory and is something you should avoid but can never really get rid of.
Exploding Topics explains that online fraud can take on many forms. From account takeovers to “friendly fraud,” no online store that accepts payments on its platform is safe.
It’s a costly pain because eCommerce businesses lose about $48 billion year-on-year. Here’s the good news: online fraud doesn’t have to be your company’s reality. With the strides made in fraud prevention tools, all you have to do is concentrate on growing your brand and turning a profit.
In this article, we’ll explain the importance of fraud prevention tools for your online business.
Safeguarding Your Reputation
Fraud prevention is the cornerstone of every successful eCommerce business. Sometimes, even online stores can fall victim to dubious scams.
You want to offer excellent customer service but that encompasses all eCommerce solutions, including fraud prevention.
Infosecurity Magazine recently reported that a sophisticated criminal network lures unwitting online users to fake websites via Facebook ads. Dubbed Eriakos, the Content Delivery Network (CDN) targets mobile devices.
The publication has warned that 608 fraudulent e-commerce websites have thus far been discovered to be operated under a single group. The scam was specifically designed to gain access to customer card details and their funds.
There’s no telling how far cybercriminals will go to get what they want. Many operate under the guise of legitimate businesses. That’s what makes it so scary. They are preying on a customer’s loyalty to that brand.
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Benefits of Fraud Prevention Tools
Your first line of defense is always your online platform and payment gateway. Invest in eCommerce software or SaaS solutions that prioritize your client’s security and privacy.
From the second they click the checkout cart to the payment, you need to know their transaction is safe and secure.
Managing multiple online channels can also put you at risk. Your customer conversion rate might be top of mind, but without the proper software backing up your security, your revenue streams could drastically fall.
These tools are more than just preventing online fraud or website hacking. They are essential in implementing solutions. They leverage innovative features such as AI and machine learning (ML) to spotlight suspicious activity.
Fraud prevention tools can detect proxies during checkout, online payment and other activities.
Unlike outdated fraud prevention methods, your best bet is to purchase an AI-powered platform that differentiates between real and fake customers. PayPro Global advises that the AI tool should analyze data to make sound decisions and identify fraud patterns with accuracy.
Most Common Scams
As mentioned before, brand impersonation is one of the most common eCommerce scams. An organization or person will pretend to represent a trusted brand, tricking the online user into parting with sensitive information.
Brand hijacking is another form of brand impersonation where cybercriminals impersonate a brand via an email marketing campaign or cold-calling.
Those familiar with cybercrime happenings will know about the recent SubdoMailing campaign. The ad fraud campaign is currently using more than 8,000 legitimate domain names to send up to 5 million emails a day to generate revenue via scams and malvertising.
Because the domains and subdomains belong to trusted companies, they can bypass spam filters and secure email gateways.
Malware and hacking tools can cause just as much destruction if not more. The main purpose is to gain unauthorized access to a system and either steal information or cause disruptions. Keyloggers, remote access trojans and ransomware fall into this category.
AI Turning the Tide
To combat rising cybercrime, financial institutions are turning to AI technology. According to Sumsub, identity fraud in fintech rose by 73% between 2021 and 2023. While banks and other financial companies leverage AI to their advantage, so too are cybercriminals.
Companies like Visa and Mastercard recently scaled their risk assessment tools. UK neobank Revolut also took the same route and introduced an advanced AI scam detection feature.
André Ferraz is the CEO of a digital solutions company. He tells Forbes that businesses need to create solid fraud prevention strategies. By staying abreast of the latest trends in fraud prevention, eCommerce platforms have a fighting chance.
Ferraz suggests companies include a strong verification process to identify and flag repeat offenders. AI, ML and biometric technologies can ensure user verification authenticates identities and safeguards any digital exchange.
Sometimes, eCommerce platforms institute changes when it’s too late. Fraud prevention isn’t a want, it’s a need. If your company operates exclusively online and handles global payments, you’ll need these tools to help your brand survive. Don’t become another victim of fraud or cybercrime. Be proactive and not reactive.