Forter, an e-commerce fraud prevention platform, released a study that highlights where e-commerce fraud happens the most for consumers around the world. We speak with Bill Zielke about Forter’s findings on e-commerce fraud and the implications on consumers and merchants for guarding against these fraudsters.
Kevin Xu: What are Forter’s predictions for online fraud after the EMV liability shift? Are the current encryption and tokenization solution prepared to handle the influx of fraud attempts? Forter believes North America online fraud will increase by at least 50% by 2018.
Bill Zielke: Forter is concerned that rules and scores based fraud prevention systems may not scale at 50% + spike in fraud. As a result, merchants will see increased fraud losses and many good customers will be unnecessarily impacted by manual fraud review efforts.
In addition, consumers will have to wait for their orders to ship to allow time for retailers to complete manual review procedures.
How does Forter provide 360 protections against fraud?
Forter offers decision as a service that approves/declines every single transaction in real time eliminating the need for manual reviews. Forter’s decisions are covered by a 100% chargeback guarantee, even for difficult international transactions blocked by most retailers. If were wrong, we take the hit.
The Forter system leverages machine learning and three layers of technology (behavioral, cyber intelligence and elastic identity) to automatically make decisions in real time.
What does the EMV shift mean for Forter’s business in 2015?
Undoubtedly, EMV will cause fraudsters to shift their focus to the online channel. Many of these fraudsters will be semi-professionals opportunistically moving to the web from physical retail.
This shift will result in higher false positives as retailers catch good customers in their manual review efforts. Higher quantities of successful fraudulent transactions will cause higher charge-backs for retailers. Retailers will then restart the cycle of refining fraud rules, tuning the review process, etc.
Ultimately, good customers will be unnecessarily impacted as will overall e-commerce sales. Forter is well positioned to help as we are the only system that automatically reviews and approves/declines every singles transaction, in real time. Our decision as a service approves/declines every single transaction in real time eliminating the need for manual reviews, management of rules, or transaction scoring.
For a complete break down of fraud rates based on Forter’s study by continent and country, take the jump.
Global Fraud Trends, Forter Analysis Group, 2015.
Bill Zielke, CMO at Forter
Bill is an experienced eCommerce executive. Before joining Forter, Bill was a Senior Director and Head of eBay Motors. Prior to that, he helped bring numerous new products to market, notably in his roles as Head of PayPal NA Merchant Marketing , VP Merchant Marketing at Bill Me Later and VP Product at CheckFree. In the earlier days of his career, Bill served as a Senior Risk Advisor at JP Morgan Chase. Bill holds a Bachelor of Science degree from Transylvania University
