Learn how a granular approach to risk management can help you fight fraud without blocking your loyal shoppers.
With Black Friday and Cyber Monday almost upon us, swiftly followed by Christmas and the January sales, ecommerce retailers are preparing for their busiest period, and can expect volumes to skyrocket by as much as 30%.
Adyen helps us maintain the balance between blocking fraudsters and approving our genuine shoppers. - Superdry
Along with an increase in sales however, comes the inevitable hike in fraud. This truly is a festive season for fraudsters, who take full advantage of the increase in volume and traffic - knowing that retailers’ attention is elsewhere at this busy time.
Additionally this year, US retailers can expect to face an increase in attacks on their online stores, as the rollout of EMV at the point of sale will drive more fraudsters online.
The temptation is to go one of two ways:
The first is to ramp up your risk settings and treat every transaction as suspicious, but this comes at the cost of conversion rates. Many retailers report a tripling of their risk refusal rate from the industry of average of 3% to 10% during this period.
The second is to accept fraud as an inevitable side effect of this peak period and lower your risk settings. This will lower your false positives but you can expect your fraud rates to soar, leading to lost revenue from chargebacks.
The answer lies in a granular approach to fraud defense.
During this busy shopping season, a small adjustment in either direction can have a huge impact on the bottom line. The answer lies in a granular approach to fraud defense. Here are three ways you can target fraudsters while ensuring a frictionless experience for your loyal shoppers:
1. Identify the shopper behind the transaction
Using device fingerprinting and transaction linking you can track shoppers across devices, networks, and online personas and build a holistic view of the behavior of both fraudsters and your loyal customers. In that way you can identify and block fraudsters while allowing your customers to shop unhindered - even if they checkout as a guest or significantly alter their behavior.
2. Spot suspicious behavior at the checkout
A good way to detect bot attacks is through hyper-specific behavioral tracking during checkout. By analyzing keystrokes, mouse behavior and speed of interactions, it is possible to determine whether it is a human or an automated system. In this way you can detect ‘card testing’ and other high-velocity attacks used by fraudsters.
3. Adjust transaction velocity thresholds
Your shoppers’ behavior is likely to change during this period. They might purchase more regularly, or spend more per transaction. To prevent your risk settings from identifying these shoppers as fraudsters, you can keep false positives to a minimum by adjusting your thresholds to anticipate different buyer behavior.
Adyen has an integrated risk management system called RevenueProtect which uses a combination of Adyen’s transaction data and technology, to build intelligent risk profiles designed to find the optimal balance between fraud prevention and a frictionless payment experience. This includes its dynamic transaction-linking algorithm ShopperDNA, fully customizable Risk Rules Engine and behavioral analytics tools.
“There is a lot to consider when preparing for Black Friday, Cyber Monday and Christmas - including the inevitable increase in fraud. Adyen helps us maintain the balance between blocking fraudsters and approving our genuine shoppers so we can be sure our sales are maximized during this peak period”. Richard Brown Fraud & Payment Analyst, Superdry
We wish you all a very happy shopping season!