Fraud management optimisation

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Synopsis: How up to date is your knowledge of the total cost of fraud in your business? Today fraudsters are becoming increasingly sophisticated and organized: eroding margins and threatening growth …

Synopsis: How up to date is your knowledge of the total cost of fraud in your business? Today fraudsters are becoming increasingly sophisticated and organized: eroding margins and threatening growth models. Elie Casamitjana will guide you through the issues businesses need to tackle to stay ahead from technology and data to compliance and control.

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  • 1. Online fraud is still a big problem and as long as the number of online shoppers continues to grow, so will the number of fraud cases. According to the European Central Bank there were 7.9 million cases of fraud with a value of 1.16 billion euros in 2011 of which 56% took place in e-commerce. European Merchant Services organizes the EMS RISK EVENT annually for retailers who are active in e-commerce and multichannel. It is an excellent opportunity to increase your knowledge in the field of online fraud, risk management and advanced fraud prevention and detection tools. We help you to stay ahead of online fraudsters and to protect your online business by sharing the knowledge and experience of our fraud and risk experts, our customers and our partners. Do you want to attend next year’s EMS RISK EVENT? Please contact the EMS Marketing Department at T +31 20 660 3054 or send an email to For more information visit Follow us on:
  • 2. Fraud Management Optimisation: a Key to Business Growth • 2013-05-22
  • 3. Path to Awareness Keys to Optimized Fraud Prevention
  • 4. Path to awareness
  • 5. A few observations
  • 6. Is fraud a priority elsewhere? • Fraud rate NL : 0.4% • Fraud rate FR : 1.4% • Fraud rate UK : 0.8% • Fraud rate DE : 0.6% • Fraud rate BE : 0.6% Selling abroad means exposing your business
  • 7. Think global, Act local iDEAL in NL ELV strong in DE BC/Mistercash in BE Credit Cards in BE, FR, UK PayPal in UK & DE 3-DS in France AVS in UK  Chargeback risk? E-wallets and alternative payment methods
  • 8. What is your “Cost of Fraud” ? Sound understanding of direct & indirect costs Monitoring evolution Direct financial costs Missed revenues Prevention costs
  • 9. Keys to optimised fraud prevention
  • 10. Data is key Personal data Billing/Shipping data Card data Shopping basket data
  • 11. Card country Product category Average amount IP country Time to delivery … combination of all the above Identify who is a threat to your business Affiliate fraud Social engineering Friendly fraud +
  • 12. Real time Behavior mapping Rules & Profiling Device Fingerprinting Smart authentication (3-D Secure, AVS) Etc. Blacklists, greylists, whitelists Use cross-merchant databases
  • 13. Exchange with your peers
  • 14. • Mobile top up provider • Propose recharge of 25 European mobile phone networks • 50 000+ transactions per month • Triple digit yearly growth since 2010
  • 15. Key Challenges • Larger volumes & better visibility led to more fraud threats • International development. First stop: France  More fraud attempts, less conversion  Narrowed margins
  • 16. Situation before 30% of orders were blocked Fraud rate above 1%
  • 17. Solutions • Use of the latest technologies such as Device Fingerprinting and Smart 3-D Secure • Implementation of a second layer of protection • Better profiling of Positive and Negative customers • Loosen their fraud rules and velocity checks • Outsource the reviewing of suspicious transactions
  • 18. After 2 months
  • 19. • Flag carrier of India • 102 Aircrafts • 49 Domestic destinations • 26 International destinations • Founded in 1932 AirIndia (Airline)
  • 20. Key Challenges • Two brands Merger – Air India and Indian Airlines • Bottleneck in Scalability of Manual Review • Team Awareness • Cleaner fraud with IP, Card country and others Matching • Travel agent VS Fraudster
  • 21. Situation before 90% of orders were manually reviewed Time taken for review was 8hours
  • 22. After 6 months 0.34% 0.15% 0.20% 0.09% 0.02% 0.01% -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% Apr/11 May/11 Jun/11 Jul/11 Aug/11 Sep/11 Chargebackrate Charge back rates fell from 0.34% to 0.01 % 2 hours Information available on 1 single screen 8 hours Need to review data from different sources Lead time for manual review reduced
  • 23. After 6 months Reduced time between booking and flight… For international & domestic flights Till Last Minute From 72 hours REVIEW REVIEW 3-5%90%
  • 24. Results • Fraud losses were drastically reduced • Increase in ecommerce sales • Order acceptance up to 35% • Reduced Cost and time taken for manual review • Profiled Positive and Negative Customers • New routes were adopted easily
  • 25. Ogone Payment Services a leading payment service provider with global reach
  • 26. Ogone Payment Services 42,000 businesses worldwide trust Ogone to manage, secure and collect their online and mobile payments 137 Mo transactions processed in 2012 (worth € 16.6 Bn) 200+ acquiring partners and banks 200+ resellers, industry partners and shopping carts sofwares 80+ international, local and alternative payment methods 1000+ new merchants per month 20+ white-labels
  • 27. Part of the Ingenico Group
  • 30. Thank you