AIB Merchant Services

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AIB Merchant Services eCommerce Risks and
Preventative Tactics Chris Owen
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Introduction

• Risks that can be encountered
• Fraud Prevention tactics
• 3DSecure
• Hidden costs of fraud

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Risks

• The value of internet fraud is growing
• Some merchants have had to close because of fraud
  losses
• Authorisation is NOT a guarantee of payment for
  eCommerce items
• Excessive fraud can result in card scheme
  sanctions, fines / chargebacks
• email often overlooked it is also eCommerce

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Fraud Prevention Tactics (i)

• Know your geographical market
• Why sell to the whole world?
• Review all transactions for the unusual
• Rush orders and special delivery requests
• email details versus name, do they match?
• What is the IP address, where is it from?
• Does Issuer bank match the other details?
• Time of the order
• Multiple cards being used, etc

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Fraud Prevention Tactics (ii)

• Use Delayed / Deferred Settlement (24hrs)
• Void ( or refund) suspect fraud
• Use velocity monitoring and other tools
• Address checking, telephone purchaser
• Fraudsters always repeat success
• They always go for the expensive items
• Dont make it easy for them or help them
• Be prepared to accept some (small) losses

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Fraud Prevention Tactics (iii)

• Discuss with your Acquirer
• If you have concerns
• Fraud prevention tactics
• If you are changing / expanding product range or
  markets
• Individual possible frauds
• Chargeback implications

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3DSecure

• 3DSecure does not always stop fraud
• You still have to monitor sales
• Shifts liability away from the merchant
• But only for credit cards and not for Laser
• Does not matter if the cardholder is not (or has
  not) registered
• Some customers might shop elsewhere
• Publicise it, Promote it, Be upfront

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Hidden Costs of Fraud

• Excessive fraud can lead to sanctions
• Excessive chargebacks can result in fines
• Time and staff costs
• Chargeback management
• Biggest risk is to your REPUTATION
• Put fraudsters out of business not yourself

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Thank youfor listening