Online Retail Risk Management

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Online Retail Risk Management

  1. 1. Internet Retail Expo 2012 “ Online Retail Payment Fraud & Risk Management” Dipti Rajpal www.ebsrms.com Risk Management Solution
  2. 2. Fraud Affects all Merchants <ul><li>Online credit card fraud is $8.53 billion Industry. </li></ul><ul><li>4% of Revenue lost due to frauds </li></ul><ul><li>Percentage of accepted orders which are later determined to be fraudulent is approximately 2.5% for domestic & 4.7% for intl. orders </li></ul><ul><li>Less than 5% of the Merchants have effective Fraud prevention in place </li></ul><ul><li>Merchants rejected intl. orders nearly three times higher than domestic orders </li></ul>Internet Retail Expo 2012
  3. 3. How do fraudsters obtain consumer Information? <ul><li>Unsecured servers & databases </li></ul><ul><li>Unknown log files </li></ul><ul><li>Unsecured websites & shopping carts </li></ul><ul><li>Employee misconduct </li></ul><ul><li>Phishing Emails </li></ul>Internet Retail Expo 2012
  4. 4. Common Online Fraud Prevention Tools Can Fall Short <ul><li>CVC/CVV – Card Verification Value/Code </li></ul><ul><li>AVS – Not accurate and N/A in India </li></ul><ul><li>3D Secure(VBV/MCSC) offers limited </li></ul><ul><li>coverage </li></ul><ul><li>IP address – can be spoofed easily </li></ul>Internet Retail Expo 2012
  5. 5. Chargeback Types <ul><li>No cardholder authorization </li></ul><ul><li>Goods not shipped/service not rendered </li></ul><ul><li>Goods not as described/defective </li></ul><ul><li>Duplicate processing chargebacks </li></ul>Internet Retail Expo 2012
  6. 6. Threats for Online Retail Merchants <ul><li>Loss of Merchandise </li></ul><ul><li>Potential termination of merchant a/c due to Excessive Chargeback </li></ul><ul><li>Brand damage/Reputation </li></ul><ul><li>Fines from Visa/ MasterCard / Acquiring banks </li></ul><ul><li>Currency conversion risks </li></ul><ul><li>Other Operation/ Review costs </li></ul>Internet Retail Expo 2012
  7. 7. Preventive Measures for Stopping Fraud <ul><li>Bulk orders from same customer </li></ul><ul><li>High value transaction </li></ul><ul><li>Velocity checks </li></ul><ul><li>Multiple retries </li></ul><ul><li>Negative/positive customer list </li></ul><ul><li>New technologies: Device Identification, Nexus, Proxy detector etc. </li></ul>Internet Retail Expo 2012
  8. 8. Guidelines for winning more Chargebacks <ul><li>Strong refund policy </li></ul><ul><li>Crisp & clear Terms of service </li></ul><ul><li>Delivery schedule and terms </li></ul><ul><li>Email confirmation – After transaction & during Delivery confirmation </li></ul><ul><li>Shipment Tracking/Reference by email (must retain copy in server) </li></ul>Internet Retail Expo 2012
  9. 9. Overview- What We Do <ul><li>Forensic Client Device Identification </li></ul><ul><li>1000+ Rules and Algorithms </li></ul><ul><li>User-defined Risk Models </li></ul><ul><li>Velocity Checks </li></ul><ul><li>Negative & Positive Database - IP Ranges, Chargebacks, Carders, Hackers, Bots </li></ul><ul><li>Nexus - Maps fraudulent Patterns in transactions </li></ul><ul><li>Customizable Reports </li></ul><ul><li> </li></ul>Internet Retail Expo 2012
  10. 10. abuse X Name: Mary Poppins Email:pop25@gmail.com 123 Las vegas blvd Las Vegas, NV 702-534-7698 IP:206.45.95.01 Geoloc: Nevada cc: 4563296511117777 X abuse Name: Abraham Zakaria email: az@chase.com 615 E. 35th St New york, ny 212-365-7878 IP:94.115.85.10 Geoloc: New york Cc: 5125189074381930 abuse X Name: Aaron Wall email: [email_address] 8 Hollyoke Ave Minneapolis, MN 320-698-8354 IP:72.138.11.9 Geoloc: Minnesota Cc: 4123234534568759 suspect suspect ? ? Fraud Management with Device Identification
  11. 11. Screen Shots – Device ID
  12. 12. AVS Blocklist Velocity Checks Device Information How EBS Fraud Prevention works? Fraud Filters Internet Retail Expo 2012 GOOD SUSPECT FRAUD TRANSACTIONS Nexus
  13. 13. Nexus Internet Retail Expo 2012
  14. 14. Risk Management Solution Visit us @ EBS Counter Free Chargeback Guide! [email_address] “ Fraudsters know you, Now you will know them Better” Thank you Internet Retail Expo 2012
  15. 15. Risk Management Solution Visit us @ EBS Counter Free Chargeback Guide! [email_address] “ Fraudsters know you, Now you will know them Better” Thank you Internet Retail Expo 2012

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