What Features Should Your Fraud Prevention Tools Have?

With the rise of the E-commerce industry, merchants have become vulnerable to new types of fraud. These frauds not only harm the merchant’s finances and reputation but also diminish the trust and confidence of the customers. 

The best way for merchants to safeguard against fraud is to use fraud prevention tools. These tools help merchants to avoid fraudulent purchases and help the merchant to verify the credentials of the purchaser.

Fraud prevention tools use identity verification, data-sharing, rule-based risk scoring and automated risk analysis to verify a transaction. Here are some features that are a must-have in fraud prevention tools:

Geolocation feature

This feature helps in identifying the IP address and the location of the purchaser, if you experience fraud from a certain region you can perform additional checks and scrutiny on them. This also helps in verifying whether the card that is being used for the transaction is in the same region as its billing address or not.

It also allows the merchant to ask for location data access from the customer’s phone or browser to verify their location.

Device Verification

This feature allows the highest degree of security in an online transaction because it uses past data records to check if the device being used is the same as before. If a new device is being used to perform a transaction the original customer can be alerted that someone was trying to use their credentials from an unknown device.

Fraudsters cannot circumvent this feature easily as each device has a unique ID that is difficult to manipulate.

Velocity Checking

This feature involves checking the rate of transaction and frequency of these attempts. Most fraudsters will try to do as many transactions as possible within a small time frame, the velocity checking feature can analyse this and block these transactions.

Another method used by fraudsters is card testing, in which they do small transactions to check if the card will work or not. In this case, the velocity checker will see these attempts and check for a similar IP address, Device ID, and location and then block the transactions.

Fraud Scoring Feature

The fraud scoring feature uses data models to identify possible fraudulent transactions. It will produce a score that is the probability of the transaction being fraudulent. This score is then used to approve, reject or flag a transaction.

This tool can have a varying degree of use depending on your business needs. The fraud indicator score can be adjusted according to the type of fraud faced by your business.

Newer fraud prevention tools use artificial intelligence and machine learning to produce a threshold score for comparing a transaction’s legitimacy. The AI and machine learning algorithms will analyse previous records to perfect their analysis. 

If you are looking for fraud prevention solutions for your business you should get in touch with a reputable firm such as Accertify. Accertify has a comprehensive portfolio of fraud management solutions so you can manage the risks of your business and keep data secure.