Global ecommerce has grown over recent years at a compound annual growth rate of more than 23%. With this explosion comes a corresponding rise in online fraud, fuelled also by the global drive to EMV and the increased security this delivers for card present transactions. As one door closes, fraudsters are quick to open another, probing with growing professionalism for new opportunities and areas of weakness.
Sophisticated online fraud prevention strategies and tools are being adopted around the world to counter this threat – but there are significant differences in the way these tools are implemented and in the specific nature of the fraud challenges faced by merchants in different geographies. International expansion through cross-border ecommerce demands an understanding of the fraud profiles of the countries in which merchants seek to offer services, as well as an appreciation of consumer payment preferences and buying behaviours in those countries. While your fraud prevention measures may be appropriate to protect online credit card transactions, how effective are they in protecting alternative payment methods? Do you have the fraud prevention tools necessary to safeguard your business in a country where cash on delivery payments are commonplace?
The specific nature of data security and consumer protection legislation in each country will also have an impact on the way in which fraud prevention measures can be implemented. Is 3D Secure authentication mandated? If so, are you able to supplement the protocol with additional fraud detection techniques – enabling you to safely accept a percentage of transactions declined by 3D Secure – or do local regulations prevent you from doing so? What is the liability of your customers for the fraud losses they incur and how does this affect their willingness to shop online?
As new sales channels and payment methods are introduced, so these, too, are targeted by fraudsters, requiring tailored fraud prevention strategies. Mobile fraud rates are already above average and more fraudsters can be expected to target this channel as mobile commerce grows rapidly around the world. Fraud strategies and rules need to be carefully and precisely tailored to address both the specific authentication challenges that mobile commerce presents as well as the particular buying behaviours of mobile consumers in different parts of the world.
Despite the risks and complexity, international ecommerce and mcommerce represent a clear and compelling opportunity for online merchants. While there are challenges for every business expanding cross-border, specialist fraud prevention advice is available and there is much that can be learned from others who have gone before.
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