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Protecting Your Business from All Types of Fraud
16 November 2009 - Mumbai, India

Setting up an eCommerce website and selling online used to be simple and worry-free, till the ugly specter of fraud cropped up. Now in addition to the threats of viruses and hackers, you now had to keep up with and foil the new techniques invented by the fraudsters to cheat you. Tackling these threats by yourself would mean huge investments in time, technology and money. But here is the good news. Your burden is reduced greatly if your payment service provider has a good security and fraud detection system. Most cases of potential frauds are nipped early in the bud by a good risk management team.

Chargeback Issues
However, one kind of fraud which is difficult to prevent is when a genuine customer disputes a transaction and says he has not done the transaction. This is called as a Chargeback in the eCommerce industry. As per industry practice and card company rules, you the merchant, holds the responsibility to prove that the customer actually initiated the transaction and also have to prove that the goods have been delivered to him. While a Chargeback was meant as a facility for customer protection so as to allow customers to reverse financial charges levied on their online purchase in case the goods have not been delivered or are not up to their satisfaction, it is frequently misused by customers to commit fraud. The new third factor authentication process mandated by the banks will help protect you against such chargebacks. This additional layer of protection, called third factor authentication, is known variously as Verified By Visa (VBV from Visa), MasterCard Secure Code (MSC from MasterCard) and AmEx AVS (Address Verification System from American Express). With this in place, the customer will have to type in an additional password which is like a PIN number. This is known only to the customer. Only when he puts in the correct PIN number, will the transaction will go through. The act of putting in the correct PIN number shows that it is the genuine customer who is doing the transaction and he subsequently cannot claim that he has not done that transaction. While this process will help you, you are still at risk from fraud caused when stolen card data or from stolen bank information gets used at your website.

How you can protect your business?
The simplest and most effective way to detect any type of fraud is by selecting and integrating with the ‘right’ payment service provider i.e. a provider who has a robust fraud management system, which will help reduce the amount of fraud.

India's premier payment gateway provider CCAvenue has an unrivalled Heuristic Fraud Detection engine that provides an unprecedented level of risk detection. The F.R.I.S.K. engine augments its system by mapping every transaction passing through its gateway against a comprehensive negative database built over the last 8 years from fraudulent transactions that have taken place in over 90% of India's Merchants. This database provides it with behavioral purchasing patterns for each industry, which helps identify fraud patterns.

CCAvenue F.R.I.S.K. engine has a large risk management team that investigates every suspicious transaction and then flags the transaction to alert its merchants of potential fraud threats. This allows you to decide which transactions you wish to process based on the level of alert instead just blocking all suspicious transactions through an automated system.

CCAvenue is also PCI DSS Compliant i.e. it adheres to the Payment Card Industry Security Standards Council's stringent set of rules and regulations with regards to transmitting, processing and storing cardholder data. This not only protects the cardholder data from sophistication of online fraudsters but also protects your core business.  

To summarize, CCAvenue F.R.I.S.K. engine uses a combination of best practices, leading technology and human interaction to provide an unprecedented level of risk detection that can help you to convert more valid orders automatically and reduce potential chargeback losses.

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