Why fraud detection matters

Several issues persist in the payment industry: low acceptance rates, high payment processing costs, slow processes, and dealing with integration issues for different payment methods.

Several issues persist in the payment industry: low acceptance rates, high payment processing costs, slow processes, and dealing with integration issues for different payment methods. With about 30% to 40% denied transactions, merchants lose millions by blocking good customers and paying fraudulent transactions. Preventing fraud by prior detection is achievable, and imperative for business. Furthermore, disposing of a good payment stack flow is as necessary as fraud detection to grand customers’ comfort and security.

What are Payment Frauds

Payment frauds are transactions made without the cardholder’s consent. Most cases happen due to stolen credit card details, checks, and debit card information. Criminals range from amateur card testers — most likely to be caught by anti-fraud systems — to experienced ones, whose attacks mimic specific client information (location, browser language, and others) — much harder to detect. Usually, online payment fraud is a fast method of money laundering, and reality does not indicate it is decaying soon.

What is happening in LATAM

Worldwide, merchants will lose $362 billion to online payment fraud between 2023 and 2028. This statistic underscores the critical importance of addressing fraud prevention in the e-commerce landscape. Dealing with the aftermath of fraudulent transactions is not only time exhausting but dangerous for online sellers.

Customers tend to blame brands for lack of security in their e-commerce, having robust fraud management and exceptional customer support is imperative for any online business. Building and maintaining customer loyalty hinge on the ability of merchants to prioritize security and provide a trustworthy shopping experience.

Merchant’s side

Card-not-present (CNP) fraud is a persistent challenge in e-commerce checkouts, which makes fraud detection investment a need for every business. The repercussions of fraudulent transactions extend far beyond the immediate loss of merchandise. Merchants also face high chargeback fees imposed by both payment providers and dissatisfied customers, impacting negatively the overall online business reputation.

Merchants can either choose if they have the necessary time, data, and qualified staff for developing their own anti-fraud management or if outsourced solutions might be a better option for their necessities. Either way, some points must be considered, such as discriminating what requires human review and what doesn’t. By doing so, operational costs and automation boost would be reduced.

Another important consideration is IP analysis, i.e., checking geolocation and whether the user is using VPN, proxy, emulators, privacy software, which would detect suspicious activities and mitigating risks effectively. Specially because sophisticated criminals often mimic genuine buyer behavior and even have customer information at their disposal.

Customers’ side

Customer experience during instances of fraud is filled with frustration and inconvenience. From contacting banks to cancel credit cards to losing money through bureaucratic processes, the impact on customers can be significant. Furthermore, waiting for chargebacks often results to diminish customer loyalty.

However, there are some preventions merchants should inform buyers of. Using a single credit card for all online purchases is ideal, since it makes it easier for anti-fraud systems to detect abnormalities and cancel the card if needed. Setting up unique and effective passwords; employing security software; and updating OS regularly also protect customers’ devices and information leaking.

Yuno’s Solution

Yuno offers several tools to ease merchants’ payment orchestration from a user-friendly Dashboard.  As a payment integration software, Yuno cares about bringing a safe environment for merchants and ultimately their customers. An intuitive dashboard provides useful information for teams to analyze how payments are being processed.

Amongst other benefits, Yuno offers:

  • Global and Local Payment Ecosystem;
  • Merchants’ access to their clients’ preferred methods;
  • Constant addition of payment methods worldwide;
  • Smart Routing to increase payments approval rates while offering a seamless user experience;
  • Fraud Management and Tokenization, with a PCI Level 1 compliant.

Discover more ways you can benefit from Yuno’s payment solution, book a demo and unlock your business growth.