4 Ways to Tackle Cross-border Payments Fraud

Cross-border e-commerce can be a great way to boost sales and widen your reach to new markets and prospective buyers. But it comes with risks related to fraud and data theft, hence every business looking to expand cross-border needs to know what it is up against. Reports found that fraud concerns rank high in the minds of business owners. 56% of businesses cite cross-border payments fraud and payment data theft as major concerns. At some point every business has to consider selling in international markets and has to test the waters. Taking a blind leap of faith, without adequate prepping, might not be the best or safest option. Hence, brands not only need to understand the nuances of selling overseas but also design a robust fraud strategy. Read on to know more.

What should brands do?

Payment fraud has damaging impact on your customers, and in turn, your brand image. Hence, you need to take the steps to secure your business and payments.

1. Payments Compliance
First of all, ensure your payment processes are complaint for cross-border commerce. This means being aware of local rules and regulations and aligning with them. In Europe, you must comply with the revised Payment Services Directive (PSD2) norms. This law aims to combat fraud and secure digital payments in Europe. You also need a PCI-DSS certification to store and process card payments and protect cardholder data from misuse.

Know more: 4 Payment Regulations Every Business in Europe Should Know

2. Strong authentication
Strong user authentication is an absolute must if you want to prevent fraud. It is critical to verify that the customer is genuine before you process a payment. This is particularly true in case of card-not-present (CNP) transactions where the merchant and the customer are in two different locations. For all digital payments in Europe, Strong Customer Authentication (SCA) is necessary for all digital transactions, as per the PSD2 norms. Using multi-factor authentication and tools like 3D Secure 2 helps you perform SCA and ensure payments are safe. But while setting up authentication rules, it is important to balance security and speed, without adding too much friction to the checkout process. Also, AI-based payment tools analyze every transaction to draw insights that you can use to beef up your security settings, as and when required.

Know more: SCA and multi-factor authentication in Europe

3. Next-gen Technology
You have to make your business and your payments future-proof if you are to carry on selling cross-border. Next-gen tech tools are quite advanced and help you prevent fraud in cross-border sales. Whether it be using AI-based fraud prevention tools or 3D Secure 2, these tools give you an edge when fighting the advanced hackers of today. You also have to ensure your tech stack is performing at 100%. This means ensuring your payment tools and processes are working seamlessly with other functions within your organization.

Also read: Why AI-based fraud prevention tools are Essential

4. Data-driven Insights
Data is gold in today’s business. Analyzing your payments data and transactions can give you real-time insights that help you to prevent fraud. AI-based risk management tools use advanced algorithms and machine learning to analyze millions of transactions to detect fraud as it happens. These tools can be set up to suit your business needs. The right payments partner can help you gain such actionable insights in real-time and help you create data-driven strategies to prevent fraud.

Know more: How Data Helps Your Payments

Secure customers from cross-border payments fraud but keep payments user-friendly

While preventing cross-border payments fraud is critical to every business, it is also important to keep the user experience in mind. Too strict fraud rules end up rejecting even genuine customers, leading to much frustration and abandoned sales. Hence, you must balance speed and convenience with optimum security. Today’s consumers demand quick service and expect a streamlined payment process. With the rise of mobile commerce and contactless payments, a seamless checkout across channels is what customers look for. As a business owner looking to sell internationally, you must offer an enhanced and secure payment experience to your customers. This is essential to win their trust, build loyalty and stay competitive.

How Can Novalnet Help

We are a global PSP who are trusted advisors to Europe’s leading brands when it comes to payments. Our state-of-the-art technologies and methods help businesses in Europe accept payments globally. From our instant payment plug-ins to our AI-based risk management tools, we have the resources to get you up and running with your payments in a short time, and with zero hassle. We can help you secure your payments so that you can focus on your customers. Reach out to us today to know more.

Gowri Shankar Balasubramaniam

Gowri Shankar is the IT Application Security Manager at Novalnet with versatile knowledge in Programming and System/Security architecture. Having 11+ years of experience in the financial services industry, Cybersecurity, Payment Card Industry Data Security Standard (PCI DSS). Certified in Advanced Payment Card Industry Security Implementer (CPISI 2.0), Secure Software Lifecycle Professional (CSSLP) from (ISC)².