Fraud is a growing concern for businesses around the world, especially as global commerce expands. According to the most recent data, fraud affects businesses across all sectors, with losses continuing to rise. That's the highest concern reported across modern commerce trends.
Although selling globally can exponentially increase your revenue, it also opens your business up to more security threats. Criminals innovate to create new opportunities for fraud constantly, so you need to be on guard. With that in mind, let's discuss the best fraud management solution for your global business.
What Is Fraud Management?
Fraud management is a security strategy in which a company identifies and prevents suspicious activity, often involving stolen payment information. The goal is to avoid fraudulent transactions, therefore protecting the business from chargeback fees and customers from identity theft.
Fraud management typically involves the following:
- Inspecting transaction activities
- Reviewing users and accounts
- Installing and maintaining security tools
- Learning about new, potentially helpful security measures
Why Is Fraud Management So Important in Global Commerce?
As global ecommerce grows, so does fraud. New advancements in financial technology present new opportunities for crime. Fraud attacks are occurring faster and more frequently, and with greater effectiveness. With 98% of fraud leaders now leveraging AI in daily workflows, the threat landscape continues to evolve.
Common fraud prevention methods include:
- AI-driven transaction monitoring
- Real-time anomaly detection
- Behavioral analysis
- Machine learning models
- Geolocation verification
Ultimately, these methods work to prevent stolen payment credentials and identity theft. Then, fraudsters use this information to make purchases with companies just like yours, leading to expensive chargeback fees. Oftentimes, you also lose out on product and shipping costs.
How Fraud Can Affect Your Business
Fraud is expensive. In fact, data from various financial crime reports shows that fraud losses continue to climb globally, with merchants facing compounding costs. Every $1 of fraud costs merchants multiples in chargeback fees and operational expenses.
According to various industry reports, fraud expenses keep rising. Specific fraud types cost organizations staggering amounts:
- Invoice fraud can cost the average middle-market business hundreds of thousands annually
- Occupational fraud can cost a company six figures on average
- Payment card fraud, identity theft, and account takeover fraud continue to increase
How Pay.com Helps Reduce Fraud
As a business owner, you have to be selective with how you spend your time and resources. Maintaining an effective fraud management solution can be quite complex, either for you or your employees. That's why Pay.com includes advanced security measures that can protect your business and your customers from fraud.
Pay.com maintains Level 1 PCI DSS (Payment Card Industry Security Standard) compliance. Of all four levels of the PCI DSS, Level 1 includes the most advanced regulations, which are ideal for companies with the highest number of annual transactions and advanced security risks.
As part of our PCI DSS compliance, we:
- Maintain a completely compliant environment for online transactions
- Encrypt and tokenize credit card details during transmission and storage
- Complete quarterly scans of the payment system for security threats and provide comprehensive reporting
- Offer extensive support for security issues
On top of these measures, the Pay.com system also uses 3DS2 (3-Domain Secure 2.0). 3DS2 is an authentication protocol that adds a critical layer of protection to the online payment process.
3DS2 essentially scans each transaction for certain criteria that could indicate fraud, like location and transaction size. The major credit card companies regulate these criteria based on their data.
Here's how it works: Each time a customer checks out with you, the Pay.com system transmits data elements to the customer's bank, working to confirm their identity. If the bank confirms that it's a legitimate shopper, the transaction goes through as normal. The customer gets a smooth, fast checkout experience.
If the bank flags the transaction as potentially fraudulent, the Pay.com system asks the customer to provide more input to confirm their identity. Although this is technically a security "challenge," it's still a relatively frictionless experience for the customer. They simply need to enter a code sent to their phone or sign into their banking app with a biometric.
Fraudsters with stolen card information can't make it past this security step, which is also known as two-layer authentication, as they don't have the customer's phone or biometrics. 3DS2 ensures that you only sell to legitimate customers while providing minimal disruptions for real, paying customers.
Additional Benefits of Choosing Pay.com as Your Payment Service Provider
While Pay.com always puts security first, we also provide a robust payment solution that can boost the customer experience and ultimately increase revenue. It all starts with a custom solution. Your developers can integrate with the API to add hosted payment fields to your website. You maintain control, keeping shoppers within your own environment for a cohesive experience.
Pay.com also supports a wide variety of payment methods, including popular APMs (alternative payment methods) like PayPal, Apple Pay, and Google Pay. That means you can accept the payment methods your shoppers prefer, giving them the flexibility they want.
Aside from a fast, seamless checkout experience, Pay.com also provides numerous useful customer insights. From the user-friendly Pay Dashboard, you can retrieve and filter information about payment methods, KPIs, cash flow, revenue, refunds, and more.
What's more, Pay.com's solution is affordable - we want to help you earn more money, not cut into your bottom line. We use a transparent flat-rate, per-transaction pricing model. You only pay for successful transactions. Plus, you can track your fees from the Pay Dashboard, so you always know exactly where your business is at.
The Bottom Line
No matter what you sell, fraud management is a necessary part of doing business in today's landscape. Businesses lose thousands, and even millions, of dollars every year to fraudulent activities. Whether fraud actors are using stolen credit card information or committing chargeback fraud, you must have security measures in place to protect your business.
Unfortunately, putting a security strategy in place can cost you quite a bit of time and money. Let Pay.com protect you from fraudulent activity with our advanced security measures. From Level 1 PCI DSS compliance to 3DS2, we stay on top of the latest tools so you don't have to.
When you switch to Pay.com, your business and your customers get advanced protection. Create an account to get started right now.
FAQs
What's the safest way to receive cross-border payments?
With Pay.com, you can safely accept payments from both domestic and international customers. Whether your customers want to pay with credit and debit cards, digital wallets, or ACH transfers, Pay.com protects each transaction with advanced security measures, like tokenization and two-factor authentication.
What is payment fraud?
Payment fraud occurs when a person steals payment information from someone else and then uses that information to make a purchase. The owner of the payment information did not agree to the purchase, making it an unauthorized, fraudulent transaction.
What are the components of a fraud management strategy?
The key components of a strong fraud management strategy are:
- Governance: A company's rules, processes, and practices that control fraud risk management.
- Assessment: The process of assessing risks, as well as how likely they are to occur and what their impact could be.
- Prevention: The implementation of software, policies, and procedures to protect against identified fraud risks.
- Detection: Fraud risk detection programs scan a company's IT environment for fraud and stop it before it can do damage.
- Monitoring and reporting: The ongoing work of monitoring and improving a fraud management strategy.
What are the safest payment methods for businesses?
Credit and debit cards are extremely secure thanks to tokenization. Even if a fraud actor did hack into your system, tokenization ensures there are no card details to steal. Digital wallets, like Apple Pay and PayPal, are also incredibly secure because they use encryption and multifactor authentication.
Top-Tier Fraud Protection
Let Pay.com take care of fraud management for you. We use industry-standard security tools, like 3D Secure 2.0, to authenticate purchases and ensure that every transaction comes from a legitimate customer.
