Ecommerce

Navigating the Digital Fraud Landscape: How Wibmo’s Trident FRM Empowers Merchants to Combat Fraud and Enhance Customer Trust

The Evolving Landscape of Digital FraudFrom phishing scams to elaborate whaling tactics, digital fraud has become increasingly sophisticated, posing significant threats to both consumers and merchants. Fraudsters adeptly exploit vulnerabilities and leverage stolen data to infiltrate webstores, perpetrating fraudulent activities with alarming ease. The Merchant DilemmaFor merchants, the prevalence of digital fraud presents a formidable challenge. Distinguishing genuine customers from fraudulent ones requires meticulous scrutiny, potentially introducing friction into the checkout process. However, striking the right balance between security and user experience is paramount, as excessive checks can deter consumers accustomed to seamless, one-click purchasing. Trident Fraud Risk Management (FRM) by WibmoIn response to the escalating threat landscape, Wibmo presents Trident FRM, a groundbreaking solution poised to revolutionize digital identity validation and verification. With real-time payments gaining prominence, the ability to swiftly discern between legitimate customers and bad actors has become indispensable. The Multilayered Approach of Trident FRMTrident FRM adopts a multilayered approach to fraud orchestration, leveraging cutting-edge technology and advanced analytics to accurately ascertain digital identities while maintaining efficiency and security. By seamlessly integrating with existing systems, Trident FRM establishes a framework of trust and security, empowering merchants to embrace real-time payments with confidence. Comprehensive Insights Across the Customer JourneyBeyond transactional validation, Trident FRM offers insights that span the entire customer journey. From initial discovery to final delivery, Trident FRM provides comprehensive coverage, mitigating risks and enhancing trust at every touchpoint. Empowering Merchants in a Fraught LandscapeIn a landscape fraught with fraudulent activities, Trident FRM emerges as a beacon of resilience and reliability, equipping merchants with the tools needed to navigate digital commerce with confidence. With Trident FRM, merchants can unlock new possibilities, safeguarding their businesses against fraud while fostering seamless, secure shopper experiences. Key Considerations for MerchantsAs merchants navigate the complex realm of fraud prevention solutions, several key considerations must be taken into account: — Accessibility to a robust ecosystem of security partners and technologies. — Enhanced visibility and access to industry-wide intelligence. — Flexibility and scalability to align with evolving business needs. — Option for a trial period to evaluate efficacy before commitment. — Complementarity with existing anti-fraud investments and optimization of ROI. — Provision of performance guarantees and benchmarks for reliability and efficacy. — Adaptive machine learning capabilities responsive to evolving fraud tactics. — Evaluation of true costs and benefits, including potential revenue loss from false declines. — Complementarity with authentication efforts, particularly in the era of 3D Secure. Merchant Fraud Facts and StatisticsAccording to the 2023 MRC Global Payments and Fraud Report, merchant fraud continues to pose significant challenges, with 71% of merchants experiencing an increase in fraud attempts over the past year. Additionally, the report highlights that false declines cost merchants an estimated $443 billion in potential sales annually, underscoring the importance of striking the right balance between fraud prevention and user experience. Furthermore, research by Juniper Research forecasts that global online payment fraud losses will exceed $20 billion by 2024, highlighting the urgent need for robust fraud prevention measures in the digital commerce landscape. In this context, solutions like Trident FRM play a crucial role in mitigating fraud risks and safeguarding merchants against financial losses. With digital commerce continuing to expand rapidly, merchants must prioritize fraud prevention strategies that not only protect their businesses but also enhance the overall shopping experience for consumers. Through innovative solutions like Trident FRM, merchants can navigate the complexities of digital fraud with confidence, ensuring the integrity and security of their online transactions. Author: Animesh Jha, Vice President — Fraud & Risk Management Wibmo A PayU/Naspers FinTech Company 'Ecommerce'], 'Fraud Detection'], 'Fraud Prevention', 'Merchant Services', ['Digital Frauds'

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Unveiling the Unseen: eCommerce Fraud Prevention Secrets You Need to Know

As the popularity of eCommerce grows, so does the risk of fraud targeting online firms. The digital sphere offers enormous prospects for expansion, but it also attracts clever fraudsters looking to exploit flaws in payment systems and transactions. In this blog article, we’ll delve into the lesser-known parts of eCommerce fraud prevention, revealing the methods, technologies, and best practices that may protect your business and foster client trust. The Evolving Landscape of eCommerce Fraud eCommerce fraud comes in various forms, from stolen credit card information and account takeovers to sophisticated phishing attacks. As businesses adapt to new technologies and consumer preferences, fraudsters adjust their tactics accordingly. Understanding the dynamic nature of eCommerce fraud is the first step toward building a resilient prevention strategy. Account Takeovers (ATO): ATO occurs when fraudsters gain unauthorized access to customer accounts. This can lead to unauthorized purchases, misuse of stored payment information, and identity theft. Preventing ATO requires robust authentication mechanisms, including multi-factor authentication and behavioural analytics. Card-Not-Present (CNP) Fraud: With the rise of online shopping, CNP fraud has become a significant concern. Fraudsters use stolen card details to make online purchases where the physical card is not required. Address Verification System (AVS), 3D Secure, and machine learning algorithms are essential tools for preventing CNP fraud. Friendly Fraud: Contrary to its name, friendly fraud is far from friendly. It occurs when a legitimate cardholder disputes a transaction, often claiming they didn’t make the purchase. Friendly fraud can be mitigated by clear communication, transparent billing descriptors, and comprehensive transaction records. Synthetic Identity Fraud: Synthetic identity fraud involves creating fake identities using a combination of real and fictitious information. These synthetic identities are then used to open accounts and make fraudulent transactions. Advanced identity verification methods and data analysis are crucial for detecting synthetic identity fraud. eCommerce Fraud Prevention Strategies Multi-Factor Authentication (MFA): Implementing MFA adds an extra layer of security by requiring users to provide multiple forms of identification. This could include passwords, biometric data, or one-time passcodes, significantly reducing the risk of unauthorized access. Machine Learning and Artificial Intelligence (AI): Leveraging machine learning and AI enables real-time analysis of vast datasets to identify patterns and anomalies indicative of fraudulent activities. These technologies continually learn and adapt to new fraud tactics, staying one step ahead of cybercriminals. Geolocation and Device Fingerprinting: Examining the geolocation of transactions and creating unique device fingerprints help in detecting suspicious activities. Unusual transaction locations or device behaviors can trigger alerts for further investigation. Behavioral Analytics: Analyzing user behavior helps create a baseline for normal activity. Deviations from this baseline, such as sudden changes in spending patterns or the use of unfamiliar devices, can be indicative of fraudulent behavior. Real-Time Transaction Monitoring: Implementing real-time monitoring systems allows businesses to spot and respond to suspicious transactions instantly. Automated alerts can be set up to trigger when certain criteria associated with fraud risk are met. 3D Secure Authentication: 3D Secure is an additional layer of security for online credit and debit card transactions. It adds an extra step of authentication, often requiring a one-time passcode sent to the cardholder’s mobile device, enhancing the security of online transactions. Fraud Scoring Systems: Employing fraud scoring systems assigns a risk score to each transaction based on various parameters. Transactions with high-risk scores can be subjected to additional scrutiny or declined altogether. Customer Education: Educating customers about safe online practices, secure password management, and recognizing phishing attempts can significantly reduce the risk of account takeovers and fraud. Clear communication builds a sense of security and trust. Best Practices for eCommerce Fraud Prevention Regularly Update Security Protocols: Stay ahead of evolving fraud tactics by regularly updating and enhancing your security protocols. This includes adopting the latest encryption standards, security patches, and fraud prevention technologies. Secure Payment Gateways: Choose reputable and secure payment gateways that prioritize the protection of sensitive customer data. Secure Sockets Layer (SSL) encryption is fundamental for securing online transactions. Monitor Chargeback Rates: High chargeback rates can be indicative of fraud or customer dissatisfaction. Monitoring chargeback rates allows businesses to identify and address issues promptly. Data Encryption: Implement end-to-end encryption to safeguard customer data throughout the entire transaction process. This ensures that even if intercepted, sensitive information remains unreadable. Regularly Train Staff: Educate your staff on the latest fraud trends, prevention techniques, and the importance of adhering to security protocols. An informed and vigilant team is an essential component of your fraud prevention strategy. Implement Device Authentication: Device authentication ensures that transactions are initiated from trusted and recognized devices. Unfamiliar devices may trigger additional verification steps to confirm the legitimacy of the transaction. Bottomline As eCommerce continues to thrive, so does the need for robust fraud prevention measures. By understanding the evolving landscape of eCommerce fraud, implementing cutting-edge technologies, and adopting best practices, businesses can significantly reduce the risk of falling victim to cybercriminals. A comprehensive fraud prevention strategy not only protects the business but also fosters trust and confidence among customers, contributing to long-term success in the dynamic world of online commerce. Stay informed, stay secure, and empower your eCommerce venture to flourish in the digital age. Author: Animesh Jha, Vice President, Engineering — Fraud & Risk Management Wibmo A PayU/Naspers FinTech Company Ecommerce, Fraud Prevention, Online Fraud, Online Fraud Detection, Online Payment Fraud

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Understanding ONDC and what banks must do to benefit from it

Introduction: what is ONDC and why it is a game-changer for India India’s digital commerce industry is growing rapidly. From around US$38 Billion in 2021, it is expected to touch US$120 Billion by 2026 (source: KNN India), and possibly cross US$200 Billion by 2029 (source: India TV News). Given the country’s demographics and internet penetration, digital commerce is still an underserved market in India. Thus far, its biggest beneficiaries have been large monopolistic marketplaces/platforms because of the massive investments needed. But there is a change in the air. Technology-led innovations such as India’s Open Network for Digital Commerce (“ONDC”) are creating open, network-centric digital commerce models to compete with existing platform-centric models. ONDC promises to revolutionize the country’s digital commerce landscape by democratizing access/participation. Over the next few years, the transformative effect will be similar to what UPI has done for digital payments. ONDC is a public infrastructure project being executed by a non-profit organization under the aegis of the Government of India’s Department for the Promotion of Industry and Internal Trade. In April 2022 pilot projects began in five Indian cities; 100 cities are to be covered by the end of August 2022. A number of public and private sector banks (e.g., SBI, PNB, Kotak Bank, Axis Bank, HDFC Bank) have already invested in ONDC. The “my way or the highway” approach taken by many proprietary e-commerce platforms has led to predatory practices. Smaller businesses are disadvantaged because they inherently lack bargaining power vis-à-vis these e-commerce marketplaces/platforms. ONDC aims to create a level playing field for thousands of small businesses across India as well as customers living in rural areas and smaller towns so that they can all benefit from digital commerce. ONDC is effectively a platform that allows you as a consumer to search and buy products/services that are currently offered only on multiple marketplaces, without having to log into each of them. You can conveniently browse and buy products that are listed on Amazon, Flipkart, Meesho, Myntra, Neu, or indeed anywhere else- using just one app. As a seller, registering on this platform gives you access to customers of multiple marketplaces. There is no need to list on multiple marketplaces, be tied to specific delivery partners, or comply with the different requirements of these platforms. The main beneficiaries of ONDC ONDC is designed to benefit three main categories of stakeholders: · Small businesses/suppliers of goods and services, who can access a larger market; · Customers across India (especially those in smaller towns and rural areas), who will get greater choice and better prices; and · Banks, who get another chance to be a relevant intermediary in digital commerce (both in the retail and SME space). Since the launch of UPI-based payments in 2016, proprietary payment platforms owned by non-banking players such as Google, Amazon, PayTM, etc. have accounted for a majority of digital payment transactions, especially in the retail space. Banks found themselves left behind. Both sellers/merchants and buyers/consumers are banks’ traditional customers, but third-party digital apps have effectively disintermediated them. By registering on ONDC, banks can offer solutions to both sets of customers. Banks get the opportunity to efficiently monetize their relationships with customers- a key source of competitive advantage in an increasingly digital, ecosystem-driven world. ONDC will give banks access to a much larger base of prospects and customers; it will also allow banks to offer these customers a larger bouquet of products/services (both banking as well as those offered by partners on the network). For example, banks can target retail customers with offers related to insurance, wealth management, loans, deposits, etc. Just as important is the opportunity that ONDC will provide banks to deepen their relationships with Current Account customers. India’s SMEs in particular have begun to gravitate towards fintech players and if this trend intensifies, it can spell trouble for corporate banks. Given that ONDC is designed to attract large numbers of SMEs, it affords banks a good opportunity to build and strengthen their relationships with customers in this segment by offering a larger portfolio of services, including working capital loans, Capex loans, export credit, etc. Thus, banks that choose to be part of ONDC can expect to capture greater mindshare (and hence, wallet share) of customers who choose to be active on the ONDC network. Given the “all-digital” nature and national/global reach of the ONDC, banks no longer need to worry about catering only to “local” customers (whether retail or corporate). Across segments, ONDC can help banks reduce costs of customer acquisition and service delivery, thereby boosting profitability and margins. Banks will need to upgrade their technology stacks to benefit from ONDC To offline merchants/sellers, banks either offer QR codes or PoS-based payment solutions or Open Banking based Payment Gateways to e-commerce players. Therefore, banks need a deep integration of their mobile apps with those of partner merchants and/or aggregators to enable customers to use their mobile banking apps. The objective is to build stickiness for the banks’ mobile apps, but the absence of an industry-standard protocol makes this expensive and time-consuming. All this will change with ONDC. Instead of direct integration with merchant apps, banks will need the capability to connect with the ONDC platform using a standard Beckn protocol, which is an “open, interoperable and universal transaction protocol to enable a decentralized digital economy,”(source: beckn). This will enable customers to use the bank’s app to: · easily register on the ONDC platform and discover products/services; · search for products/services they need using criteria such as geo-location, sellers, price ranges, etc.: · Make purchases; and · Manage returns and resolve disputes more easily and speedily. Provided banks are ready with the necessary technology components for ONDC, they can thus deliver access to a wider range of products/services as well as a smoother customer experience. Merchants joining ONDC will expect banks to provide a complete Digital Commerce solution that seamlessly integrates offline/online registration on the platform with transaction experience and banking services such as collecting customer payments and paying suppliers. Banks

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