Whether you have an established online business or you are just starting a new one this year, you will notice that fraud rates are a huge obstacle.
Online fraud can take many forms. You may notice that your user’s accounts are under attack by hackers. or you may notice that your transactions return high chargeback rates. Even worse, you may notice that fraudsters using synthetic IDs are putting your business at risk of not being compliant with government rules and regulations.
In this post, we will look at 4 of the best options to deploy fraud prevention tools and systems in your business. Let’s get started with built-in fraud prevention tools.
1. Fraud prevention tools that are built-into your platform
For many online businesses, the question is often whether they should build or buy. While there is a wide array of online web apps designed to connect with your platform, sometimes it makes more sense to keep things in-house.
This is especially true if you are bound by strict data protection regulations. It is also an interesting option if you have the resources and budget to staff a whole risk team to manage your fraud rates however you see fit.
The downside of course is that it can be expensive and that you may not benefit from the best scalability options. for instance, if your fraud rates are seasonal it doesn’t make sense to have a whole team and to pay them a full salary when you only need to target specific months of the year.
2. Fraud prevention tools that come with your payment gateway
How much simpler option for small and medium businesses is to look at the flood prevention tools that come built-in with your payment Gateway. Generally speaking, you won’t have to pay extra to use these tools and you should be able to enable them with a single click.
For instance, Stripe has its own solution called Dadar. Shopify also has something called Fraud Protect which you can enable as a third-party app.
It’s a good option if you have low fraud rates and don’t mind a few false positives. False positives are what happens when your fraud prevention is too strict and it blocks payments even from legitimate customers.
With a payment gateway fraud prevention you also don’t get as many options as you would with a full management platform. The options can be limiting for businesses who want to fine-tune their protection against regular attacks.
3. Google Chrome plugin for data enrichment
One of the most innovative tools to come out in recent years in the world of fraud prevention is undoubtedly the use of a Google Chrome plug-in. This simple extension allows you to gather extra information about your users based on a single data point such as an email address, an IP address or a phone number.
It is not something that many companies do offer, but it is an incredibly useful tool to add on top of an existing solution. This is because data enrichment did the perfect way to complete the picture of your users. Best of all, it doesn’t add any friction to the user journey. the results coming real-time and all the data is aggregated behind-the-scenes.
To learn more about how real-time data enrichment works from a Google Chrome plugin, check out SEON.io.
4. Full end-to-end platform to investigate and block fraud
Last but not least, if you want the most powerful solution to protect your business against fraud, you will need to look at a full end-to-end platform. These sophisticated tools allow you to log every data point connected to your business. This includes the aforementioned email address, IP address, and phone number.
On top of that, you also get tools such as device fingerprinting, which allows you to look at the configuration of software and hardware of your users. If you manage to log that information into your fraud prevention system you will get a full 360-degree view of who your users are.
This is useful because you can highlight suspicious activity and also no established connections between user accounts. In the context of problems such as multi-accounting or bonus abuse, this allows you to see if a fraudster is trying to connect to your site using several or hundreds of different identities.
It is worth noting that these tools still need to be monitored by risk management experts. While you can use artificial intelligence software to suggest risk rules, you still need a good team to oversee the results and to confirm whether the user action was marked as legitimate or fraudulent.
The key benefit of using this kind of solution is that you can still outsource all the software updates to the third-party vendor. This means that you don’t have to worry about integrating new features, about ensuring that your product is up-to-date, about software maintenance. The best fraud providers will also include customer support as part of their fraud prevention package.
There is no shortage of options for companies who need to deploy a good fraud prevention system these days. But not all options are born equal. Some of them focus on a light integration, such as SEON’s chrome extension, while others require more involvement from your IT department.
The key is to look at all the different ways you can protect your business, and to choose the one that makes the most sense according to your risk appetite, and to align with your long-term company goals.