How do you know how much fraud prevention is enough?
Payment fraud if a rampant problem on the internet that is only expected to grow. As fraud prevention strategies and technology improve so does the sophistication of fraudsters. Merchants need to act before fraud happens, but not entrench themselves in set solutions. Jeremy Waxman, our VP of Product, notes the importance of using a fraud prevention feedback loop:
“When merchants react to fraud predictions rather than proactively taking into account the unique and particular risk needs of their business, they often end up with a fraud strategy that far overreaches what they really need. Implementing an agile fraud prevention solution means it will be continually refined over months and years. Once baselines are established, fine-tuning will be a constant and merchants should be able to easily merge new technologies with existing ones to augment and tailor on the fly.”
One of the problems merchants can anticipate are chargebacks. Oftentimes customers contact card issuers out of convenience, not even realizing they are initiating chargebacks. Customers usually do not know how much chargebacks cost merchants either. Still, over-reacting to any sort of fraud threat is ill-advised. Too many front-end fraud controls drive away customers. But, as Waxman said above, all of this can be adjusted over time.