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Paul Marcantonio – ECOMMPAY – Pairing automated risk management with the human factor

Paul Marcantonio, ECOMMPAY

As technology advances, unscrupulous individuals are using increasingly inventive means to achieve financial gain.

So, what’s next for online merchants who depend on payment security? Paul Marcantonio, Head of UK/Western Europe at ECOMMPAY, thinks he has the answer.

Fraud, or attempts to defraud, are unavoidable. Where there is profit from successful business operations, there is the risk of fraudulent activity. As technology advances, the rapidly expanding e-Commerce industry becomes more of a target for modern day criminals.

Let’s be clear, online merchants depend on payment security for their livelihoods. Without effective risk management, they face substantial financial losses, not to mention fines and reputational damages.

Most payment service providers offer automated security systems as part of their payment solutions, engineering proprietary risk management solutions to defend against fraudulent activity without compromising client conversion rates.

However, there is a growing demand for a comprehensive and well-rounded, yet ultimately individual and bespoke, service for e-Commerce merchants.

Successful risk management relies on the combination of automated anti-fraud system capabilities and the manual monitoring of suspicious activity, in which analysts can immediately recognise unauthorised transactions, as well as any patterns suggesting a targeted attack.

The key is to be preemptive, not reactive to security concerns. Though automation plays a significant role in negating risk, the importance of manual monitoring cannot be overstated.

This takes us to the hallmark of ECOMMPAY’S FraudStop risk management system – the human factor, which provides added benefit by identifying fraud patterns and consulting clients on best practice.

Over the past year, considerable resources have been dedicated to enhancing FraudStop’s capabilities. Tech-savvy risk analysts, working in tandem with software developers, successfully engineered the automated system to apply machine learning to the scoring principle, which assigns a predetermined weight to each transaction variable.

Following a consultation to determine client objectives and business specifications, it is the members of ECOMMPAY’S Fraud/Chargebacks Monitoring Division who dynamically adapt existing FraudStop filters or, if necessary, create new ones to address merchant requirements. They then carefully monitor performance, adjusting where necessary.

An example of the division’s success? FraudStop’s transaction scoring module flagged suspicious activity based on geolocation and transaction sums. Risk analysts then recognised the transactions as fraudulent, resulting from credit card theft related to a data breach in a large North American bank. Immediately ECOMMPAY was able to return funds for 170 illegal transactions worth up to $180,000.

Another recent case demonstrated the importance of the human factor in detecting patterns of fraudulent activity. The team’s manual monitoring identified a notorious fraudster, who tried to register 20 different user profiles in an attempt to use stolen credit cards. Quickly recognising and negating the threat saved ECOMMPAY’s client from significant financial losses.

The secret to effective risk management is ensuring that an automatic security service is complemented by manual transaction monitoring by highly experienced risk analysts. In ECOMMPAY’s case, this combination not only keeps the fraud detection rate above 97% but has also led to a 75% decrease in declined transactions, ensuring merchants collect maximum profits while safeguarding security.

So, while fraud is unavoidable, it is certainly preventable.

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