In the wake of statistics which show online fraud has risen by 23 per cent in the last year, INFORM GmbH has recognised that retailers are losing sales by relying on security passwords to authorise customer purchases.
With online fraud on the rise, one of the most common methods for improving the security of card transactions is customer passwords. However this adds an extra layer of inconvenience for the consumer which can result in them abandoning a website before completing their purchase.
Dr. Andreas Meyer, director Risk & Fraud of INFORM, explains, “Customers continually fail to complete an online purchase because they forget their password or don’t register for one in the first place. This is especially true when using mobile devices like smart phones and tablets, every additional step is adding an extra layer of inconvenience. Online shopping baskets are left with incomplete purchases, as orders are canceled as soon as the consumer has to make the final step in the buying process.
“It has become one of the biggest pain points in the e-commerce industry. However, with the right data, customer profile and risk assessment tools, up to 95 per cent of transactions could be safely processed without needing this additional authentication step.”
In response to this industry problem, INFORM GmbH has announced its enhanced risk based solution RiskShield for 3D Secure authentication. RiskShield compliments the several card schemes being introduced with 3D Secure methods, such as MasterCard SecureCode and Verified by Visa to protect cardholders and merchants from e-commerce fraud.
INFORM’s enhanced proven fraud detection technology, RiskShield, provides a secure and more convenient solution for everyday e-commerce transactions by dynamically routing the authentication process, which is based on the risk level. By using multiple data sources, such as customer profiles, browser/device information, transaction history, along with INFORM’s patented fuzzy logic technology, pattern recognition, network analysis and conventional rule based prevention, RiskShield provides a reliable decision engine to route transactions with the right authentication level in milliseconds.
Even when an online card transaction requires a MasterCard SecureCode or Verified by VISA password, RiskShield acts as an anti-fraud safety net to safeguard against passwords that might have been stolen.
RiskShield also delivers significant cost savings from the one-time password authentication process through SMS messaging (Mobile TAN verification) by reducing the number of one-time passwords that would normally be sent.
RiskShield’s risk-based solution for 3D Secure authentication is offered as a hosted or in-house solution and provides numerous benefits for every stakeholder within e-commerce chain:
- Issuing bank: Enhanced fraud detection capabilities through data sharing between issuing and conducting transactions.
- Cardholders/Consumers: More convenience and less hassle with online purchases.
- Retailers: More revenue, less cancellations and reduction of "unauthorized transaction" chargebacks.