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Synopsis: How up to date is your knowledge of the total cost of fraud in your business? Today fraudsters are becoming increasingly sophisticated and organized: eroding margins and threatening growth models. Elie Casamitjana will guide you through the issues businesses need to tackle to stay ahead from technology and data to compliance and control.
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Online fraud is still a big problem and as long as the number of online shoppers continues to grow, so will the number of fraud cases.
According to the European Central Bank there were 7.9 million cases of fraud with a value of 1.16 billion euros in 2011 of which 56%
took place in e-commerce.
European Merchant Services organizes the EMS RISK EVENT annually for retailers who are active in e-commerce and multichannel.
It is an excellent opportunity to increase your knowledge in the field of online fraud, risk management and advanced fraud prevention
and detection tools. We help you to stay ahead of online fraudsters and to protect your online business by sharing the knowledge and
experience of our fraud and risk experts, our customers and our partners.
Do you want to attend next year’s EMS RISK EVENT?
Please contact the EMS Marketing Department at T +31 20 660 3054 or send an email to [email protected].
For more information visit www.emscard.com/riskevent
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Fraud Management Optimisation:
a Key to Business Growth• 2013-05-22
Path to Awareness
Keys to Optimized
FraudPrevention
Path to awareness
A few observations
Is fraud a priority elsewhere?
• Fraud rate NL : 0.4%
• Fraud rate FR : 1.4%
• Fraud rate UK : 0.8%
• Fraud rate DE : 0.6%
• Fraud rate BE : 0.6%
Selling abroad means
exposing your business
Think global, Act localiDEAL in NL
ELV strong in DE
BC/Mistercash in BE
Credit Cards in BE, FR, UK
PayPal in UK & DE
3-DS in France
AVS in UK
Chargeback risk?
E-wallets and alternative payment methods
What is your “Cost of Fraud” ?
Sound understanding of
direct & indirect costs
Monitoring evolution
Direct financial
costs
Missedrevenues
Preventioncosts
Keys to optimised fraudprevention
Data is key
Personal data
Billing/Shipping data
Card data
Shopping basket data
Card country
Product category
Average amount
IP country
Time to delivery
…
combination of
all the above
Identify who is a threat to yourbusiness
Affiliate fraud
Social engineering
Friendly fraud
+
Real time Behavior mapping
Rules & Profiling
Device Fingerprinting
Smart authentication (3-D Secure, AVS)
Etc.
Blacklists, greylists, whitelists
Use cross-merchant databases
Exchange with your peers
• Mobile top up provider• Propose recharge of 25 European mobile phone networks• 50 000+ transactions per month• Triple digit yearly growth since 2010
Key Challenges
• Larger volumes & better visibility led to more fraud threats
• International development. First stop: France
More fraud attempts, less conversion
Narrowed margins
Situation before
30% of orders were blocked
Fraud rate above 1%
Solutions• Use of the latest technologies such as Device Fingerprinting and
Smart 3-D Secure
• Implementation of a second layer of protection
• Better profiling of Positive and Negative customers
• Loosen their fraud rules and velocity checks
• Outsource the reviewing of suspicious transactions
After 2 months
• Flag carrier of India• 102 Aircrafts• 49 Domestic destinations• 26 International destinations• Founded in 1932
AirIndia (Airline)
Key Challenges
• Two brands Merger – Air India and Indian Airlines
• Bottleneck in Scalability of Manual Review
• Team Awareness
• Cleaner fraud with IP, Card country and others Matching
• Travel agent VS Fraudster
Situation before
90% of orders were manually
reviewed
Time taken for review was 8hours
After 6 months
0.34%
0.15%
0.20%
0.09%
0.02% 0.01%
-0.05%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
Apr/11 May/11 Jun/11 Jul/11 Aug/11 Sep/11
Chargeback rate
Charge back rates fell from 0.34% to 0.01 %
2 hours
Information available on
1 single screen
8 hours
Need to review data from
different sources
Lead time for manual review reduced
After 6 months
Reduced time between booking and flight… For international & domestic flights
Till Last Minute
From 72 hours
REVIEW REVIEW
3-5%90%
Results
• Fraud losses were drastically reduced
• Increase in ecommerce sales
• Order acceptance up to 35%
• Reduced Cost and time taken for manual review
• Profiled Positive and Negative Customers
• New routes were adopted easily
Ogone Payment Servicesa leading payment service provider with global reach
Ogone Payment Services
42,000businesses worldwide trust Ogone to manage, secure and collect their online and mobile payments
137 Motransactions processed in 2012 (worth € 16.6 Bn)
200+acquiring partners and banks
200+resellers, industry partners and shopping carts sofwares
80+international, local and alternative payment methods
1000+new merchants per month
20+white-labels
Part of the Ingenico Group
Expertise in all sectors
HOSPITALITY AND LEISURE
RETAIL
TELECOM/INTERNET /INSURANCE
Expertise in all sectors
AIRLINES / TRANSPORT
UTILITY / GOVERNMENT
TICKETING
www.ogone.com
Thank you