Fraud Prevention
When it comes to e-payment, every online merchant must protect himself against fraud and data misuse. This can be achieved by fraud prevention for e-commerce payments, also known as fraud prevention, or real-time risk management during the online ordering process. For this purpose, a store operator or e-business entrepreneur can make use of various creditworthiness and plausibility checks, which are run upstream of the actual e-payment in the backend. These fraud prevention measures can be used to check for incorrect address data and e-mail addresses, incorrect or stolen account or credit card data, and negative creditworthiness via blacklists and credit agencies (Schufa, Bürgel, etc.). In addition, the fraud prevention modules can provide protection via IP and double-booking blocks, session and limit checks, and calculate a scoring value.
Online merchants who work with a payment service provider for payment processing can usually put together the right fraud prevention for their store with their payment types from a selection of fraud prevention modules. In this case, the payment service provider should offer comprehensive consulting and monitoring. This means that the payment service provider monitors the online merchant how they order, reject and chargebacks develop depending on the payment type and fraud prevention, and then optimizes the settings accordingly.
An example of one of the highest-risk payment methods for the store operator is purchase on account. Not only is there a risk of non-payment after the goods have been shipped, but it also usually takes 2-6 weeks to receive payment. With this payment method, more and more online store operators prefer a payment service provider with a payment guarantee, which assumes the full risk and pays out every accepted purchase on account to the merchant. Here, the guarantee provider also takes over fraud prevention and checks the customer’s creditworthiness based on address and date of birth.
The payment guarantee can be an alternative to fraud prevention, but it can also lead to increased costs for the payment method and higher customer rejection rates, and thus to a declining number of orders. In principle, however, comprehensive fraud prevention and risk management to distinguish between honest and fraudulent customers is a must for every online merchant and will pay off in the long run.
Fraud prevention for credit card payments also requires PCI-DSS certification. A reputable payment service provider relieves online merchants of this obligation and is certified to PCI DSS Level 1.
