The ecommerce landscape is changing incredibly fast; in recent times new sites such as Jet.com have gone viral online and new ecommerce gadgets such as Amazon Dash Button have been launched, alongside the most anticipated product of 2017: Alexa.
Indeed, 2017 was a great year for from the perspective of product launches and outreach, but what about the less attractive sides of the industry, e.g. fraud, chargebacks, and credit card theft? Across the board, the fraud rate for transactions valued over $500 was over 22 times higher than for transactions valued under $100. Fraud rates for transactions exceeding $500 increased from 10.93 percent to 11.47 percent, while transactions under $500 showed an overall decrease in fraud rate, according to a study by Signifyd.ecommerce
With over 52 percent of US consumers purchasing products online, it's vital to provide more room for sales improvement and to reduce online fraud, the latter of which is (justifiably) very likely to find its customer loyalty decrease. An online store having more chargebacks than the industry minimum rate, is already in serious danger of losing customers to its competitors.
With these statistics in mind, it becomes very apparent that as ecommerce owners, we should be implementing every security measure possible in order to provide a more secure ecommerce experience, and to help develop loyal consumers as a result.
However, there is another aspect of ecommerce that is often overlooked when it comes to fraud; namely, early detection. As more shopping is done online, more data becomes available to us, which can then be used to help reduce the amount of fraud committed by applying the data in our security protocol.
One method of data used in ecommerce fraud prevention is social data. There are over 1 billion social media accounts, and over 7 billion people on earth. This means that 14 percent of the world's population have a social media account, which can be used to verify consumer authenticity and remove any digital fraud.
The United States is one of the few countries that have implemented social data in their security backbone that is used in real time to prevent fraud. The billions invested in cyber security is vital to the US, given the large numbers of international consumers who buy products online. Indeed, online business is becoming so globalised that many businesses now go to great pains to ensure they are able to provide a buying process for international customers.
But does have to be this hard to add more security to your ecommerce portal? The majority of online retailers have followed a checklist to prevent ecommerce fraud, this includes:
Real Time Phone Verification (SMS or Call)
Visa Verify or MasterCard Verify pincode
Order confirmation by phone
Card Number check against a blacklist of a merchant
For online fraud to occur, the perpetrator needs to have some kind of technological knowledge to bypass security measures, but this can be learnt. When it comes to social data, not many are able to pass this test as the data is harder to falsify. Social Data has many metrics, from date of birth to what the user liked in the last 24 hours. But what kind of information from social networks is used to validate a purchase order?
In order for an ecommerce platform to have access to social data, it needs to have at least the social media ID of the consumer. Ecommerce can use a contacts database for this purpose, as many will have all kinds of details about a consumer, from gender to social ID. When an ecommerce platform has found the ID, they can verify this personal information in real time through the API when the consumer places an order.
If development is a problem, or you don't have the budget to create a real time API access to its data. This way, all of the data is prepared for you, you just have to send the email ID to the vendor through API. The vendor will then be able to provide any social data available for that buyer.realtime social check, there is always the option to use an independent contact database that offers
We can look to social data as the future security protocol, where personal information is used against online fraud. Many prevention methods have become outdated, so while cheap to implement, are not providing adequate protection against fraud. Therefore, businesses who are willing to invest more money into their security, including the use of social data, are likely to see the benefits long-term.