Cyberattacks on online businesses increase every year. Online merchants are taking measures to stop these cyberattacks by using the latest eCommerce fraud prevention software and keeping up with the latest fraud schemas and fraud prevention techniques.
The problem with eCommerce fraud prevention techniques is they become outdated and software developers have a difficult time keeping up with all the different online frauds and scams.
Some common types of frauds that online businesses continually face include:
- Friendly Fraud
- Chargeback Fraud
- Refund Fraud
- Card Testing Fraud
- Credit Card Fraud
- eCommerce Fraud
- Malware Attacks
- Phishing
Preventing eCommerce fraud is not only important to preserve eCommerce revenue, but it’s also important to protect customers’ private data and financial security. There are some recommended activities business owners should take to fight fraud, according to eCommerce experts:
- Ensure all payment systems/gateways are PCI (payment card industry) or PSD2 (Payment Services Directive II) compliant.
- Use two-factor authentication while processing eCommerce orders.
- Require multiple security passwords for all credit card purchases.
- Track and assess customer behavior on eCommerce platforms.
- Require customers to sign for packages.
- Implement security software that provides alerts about suspicious activity.
- Advocate the use of strong passwords.
- Track all fraud attempts and cybercrime incidents
Establishing these security protocols is only possible if online businesses use state-of-the-art eCommerce fraud prevention software tools that are powered by machine learning (ML) algorithms.
What are ML-Powered eCommerce Fraud Prevention Software Tools?
eCommerce fraud prevention tools that are powered by ML algorithms help detect fraud by recognizing common cybersecurity threats and patterns and “learning” from historical data to predict future attacks. Machine learning systems are beneficial for preventing fraud for the following reasons:
Speed and Precision: Unlike humans and traditional fraud prevention software, ML-powered fraud prevention software tools can keep up with the eCommerce platforms' fast transaction rate. They can process millions of transactions in seconds while producing instantaneous analyses to detect fraud attempts.
No False Declines: Traditional fraud prevention software tools often “flag” customers who behave suspiciously which can result in multiple “false positives” where legitimate customers are identified as fraudsters. eCommerce vendors can lose millions every year if their fraud prevention software turns away legitimate customers. ML-powered fraud prevention software tools prevent this from occurring because they are far more precise.
Ever-Improving Security: Traditional eCommerce fraud prevention tools have many limitations that can render them outdated within a couple of years, ML-powered fraud prevention software “learns” on the job, which means it can protect eCommerce platforms from the latest fraud schemas.
There are many different types of fraud prevention tools, software and systems that businesses can choose from. Understanding how they work and their advantages and shortcomings is key to deciding which is for their needs.
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