Ecommerce fraud, consumer behavior, merchants, payments, false positives, data, machine learning. These were the buzzwords that we heard during the two full days we spent in Dublin attending the Merchant Risk Council (MRC) event that took place in May. We went there on behalf of our daughter company, Acapture, to share expertise and exchange ideas with other industry experts on the ever present topic of ecommerce fraud, something that keeps up at night all stakeholders in the ecommerce industry.
The overarching theme of the Dublin event – The Future Is Now – was very inspiring, and much related to the mindfulness trends most of us have heard of and applied in our daily life. If you haven’t heard of it, make sure you catch up on your life 😊.
So the theme actually urged all participants to live in the very moment and share ideas, best practices with each other and act upon the current challenges, feeling more confident, more equipped to confront risks and fraud.
The overall mission of MRC is to influence and trigger this great community of merchants, regulators and merchant services providers to ensure safe and pleasant online experiences to end consumers.
Looking through the eyes of fraudsters
Just like with mindfulness, here too is all about perspective. The initial instinct we have when looking to fight fraud is evaluating our own systems, improving them, making them more secure. However, focusing only on our approach makes us institutionally blind, as Patrick Dixon explained. It’s obvious that we first look at what we can improve from our side, but what we often miss is looking through the eyes of the actual fraudster. Analyzing their behavior and figuring out how do they think and make their choices can help us a lot in detecting fraud both easier and faster.
Managing fraud = knowing your customers
Getting personal. In order to talk about technology and best practices for battling ecommerce fraud, we first need to go back to basics in terms of how we manage it. And it’s as simple as that: knowing your legitimate customers and the patterns they have in their journey will help you to differentiate them from actual fraudsters.
How? As our Fraud Manager, Aldrin Mangalabal explained, by making use of the different data points along the shopping and payment journey, such as key characteristics of consumers: where are they from, what language do they use, in which currency they pay, how do they interact with your content etc. Knowing and understanding your customers so well will help you block fraudsters only, ultimately leading to happy customers and a higher conversion.
Trending tech for ecommerce fraud management
Almost too cool for ecommerce fraud. As Paul Kuykendall from Ticketmaster told us, machine learning is probably the latest innovation in the ecommerce fraud space together with big data, currently changing the fraud prevention game for merchants.
Looking at the evolution of fraud detection, we’ve gone from rule based systems to increasing machine learning deployments and further, deep learning models that go beyond machine learning technology, providing a higher level of accuracy and performance, as Fred Sadaghiani from Sift Science argued.
And coming back to our main story characters, genuine customers, their behavior patterns are crucial for machine learning and deep learning models, the must-have tools for fraud prevention and conversion optimization.
Taking a look at what the future holds for the industry, Carmen Honacker from Sony Interactive Entertainment indicated that we can consider device “fingerprinting, biometrics, facial recognition, mouse clicks, tilts of your phone” and everything that comes around biometrics to provide you an instant gratification, while making sure you are who you say you are.
Tips and tricks from experienced merchants
Understanding the actual problem. As Kieran Cotter from Argos explained, “in order to understand how to prevent it, you first need to look at what [kind] of fraud is occurring.” Afterwards, you need to assess how big the amount of fraud is, what’s driving it, based on which you can move on to putting together a mindful strategy to target the biggest proportion of fraud.
A quest for empathy and seamlessness. One of the best practices Marine Grave from Etsy shared was making sure that merchants need to be invisible to consumers by making sure all the fraud checks are being performed quickly and seamlessly. You heard her, go ahead and imagine you’re wearing an invisibility cloak while carrying out your fraud checks and look at the online experience through the eyes of the end consumer; then you’ll be able to tell whether the customer journey is interrupted in any way by your fraud verification.
All about consumers. We think MRC Dublin was a great setting for the community of merchants, merchant services providers and authorities to come together and “catch-up” with each other. That’s the only way we can learn about each other’s challenges and continue to further improve our systems. The ultimate goal of this community is making ecommerce a safe place for modern consumers, which they trust and where they enjoy coming back.