Managing Payment and Fraud - Ecommerce Masterclass

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The aim of the programme is to help businesses in Scotland take greater advantage of ecommerce by giving them access to expert advice on a variety of relevant topics. The focus is on providing practical, robust, independent “How to…” information to enable delegates to take action. At the end of the session we want delegates to have enough information to refine their existing ecommerce practices, so they can increase the value of their business.

This was a talk I gave on common sources of fraud and some new opportunities.

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Managing Payment and Fraud - Ecommerce Masterclass

  1. 1. THE ONLY WAY TO PROVE YOU ARE WHO YOU SAY YOU ARE PURELY ONLINE Common sources of fraud & how to prevent eCommerce Fraud by James Varga
  2. 2. $1 Trillian Globally in 2013 Costs UK retailers over £200m each year 3% up to 8% or 10% of turnover GROWING GLOBAL TREND
  3. 3. All fraud is increasing 53% now identity related Loosing battle it gets smarter, faster & more organised Emerging Trends in mobile Higher the value the higher the risk CONSISTENT TREND OF GROWTH both in the UK and abroad
  4. 4. Increasingly used: Device Identification, ID Authentication, Mobile Geolocation, NFC, Telephone Number Identification and Text Messaging Decreasingly used: AVS use declined, while the use of Complete Fraud Platforms and Modelling TRENDS 2014 from the merchant perspecvtive
  5. 5. 1. Card Fraud (CNP & Chargebacks) 2. Identity Fraud 3. Return Fraud 4. Man-in-the-middle 5. Hacking & Malicious Code TOP 5 FRAUD ISSUES from a merchants perspective
  6. 6. 1. Fraudulent website 2. Used cards on-line 3. Counterfeit products 4. Alleged free trials 5. Sales of tickets on-line TOP 5 FRAUD ISSUES from a consumers perspective
  7. 7. • Layered approach • Minimise the fraud in the payment system • Authorisation & Authentication • Protect vulnerable account data with encryption/etc • Security and monitor and manage events that occur • Cardholder empowerment FIGTING FRAUD in a digital marketplace
  8. 8. • Limit addresses / use address verification • Ship to vs. bill to address / out of country • Require strong passwords • Layer your security • Limit big spenders • Adding security / Avoidance TOP 5 TIPS : CONSERVATIVE from the merchant perspective
  9. 9. 1. Use fraud scoring systems maxmind, kount, Retail Decisions 2. Use device trust scores iovation 3. Social account verification trulioo 4. Identity Verification miiCard TOP 5 TIPS : TRENDING from the merchant perspective
  10. 10. Have a processes / iterate be agile be insightful be ready to adapt/adopt TOP TIP above all else
  11. 11. THE ONLY WAY TO PROVE YOU ARE WHO YOU SAY YOU ARE PURELY ONLINE MOBILE COMMERCE NEW CHANNELS
  12. 12. • Convenience faster checkout/processing of payments • Opportunity increase leads & sales generation • Conversion upsell opportunities & location-based promos • Loyalty increase consumer loyalty MOBILE CHANNEL ADDING VALUE as a new commerce channel
  13. 13. • Addressing consumer security concerns with the platform • Addressing how to manage fraud risk • Making it easier for consumers to transact versus just shopping • Making it possible to take payments more efficiently • New payment types (e.g. virtual currencies) OBSTACLES TO ADOPTION of mobile eCommerce
  14. 14. Requires new tools • ID Authentication • Secure Mobile Payments Methods • Device ID • Complete fraud platform FRAUD RISKS in the mobile channel
  15. 15. THE ONLY WAY TO PROVE YOU ARE WHO YOU SAY YOU ARE PURELY ONLINE Identity Verification NEW TOOLS
  16. 16. Identity Verification vs. Authentication Data Checks vs. Identity Proofing Security vs. Trust Terminology understanding the market
  17. 17. LEVELS OF ASSURANCE (LOA) equivalent to photo id checks Proving ‘you are you’ purely online and in real time
  18. 18. ID PROOFING & 2FA Escalating levels of assurance and multiple factors of authentication
  19. 19. 1. Online customer conversion 50% to 70% increase 2. Offline execution costs £1 / user / month 3. Fraud cost and risk up to 100% reduction 3 KEY BENEFITS in financial services & other industries
  20. 20. TRUST DRIVES VALUE levels of trust are needs driven depending on context low trust low value HIGH TRUST HIGH VALUE1.Convenience 2.Control 3.Security
  21. 21. PROVIDE BENEFITS & VALUE in the context to what the consumer is doing 1. Convenience of quicker checkouts with more options 2. Control and manageability of personal data 3. Security / Privacy to share nothing or everything, including sensitive personal data Verified Attributes PLUS: 1. Online customer conversion 50% to 70% increase 2. Offline execution costs £1 / user / month 3. Fraud cost and risk up to 100% reduction FOR THE CONSUMER FOR THE BUSINESS
  22. 22. THE ONLY WAY TO PROVE YOU ARE WHO YOU SAY YOU ARE PURELY ONLINE CONSUMER EMPOWERMENT NEW OPPORTUNITIES
  23. 23. Providing payment services isn’t enough – you have to provide value Paypal location awareness Amazon payments Google wallet Convergence on the consumer driving commerce…requiring consumer driven identities NEW OPPORTUNITIES in a changing landscape
  24. 24. THE ONLY WAY TO PROVE YOU ARE WHO YOU SAY YOU ARE PURELY ONLINE Customer driven eCommerce DISCUSSION GROUP
  25. 25. To find out more visit: www.miiCard.com e: info@miiCard.com Twittter.com/miiCard Facebook.com/miicard Linkedin.com/company/miicard Creating Trust Online Thank you

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