Retailers: Stop Blocking Authentic Users

A recent eMarketer report predicts that global e-commerce sales will reach $1.2 trillion this year. However, this continuous increase in revenue makes the retail industry an attractive target for cyber criminals. In fact, e-commerce merchants lose up to $3 billion in revenue each year to cybercrime attacks. To protect against these threats, e-tailers need to implement preventative measures that do not interrupt the shopping experience for authentic users.

On average, e-commerce websites reject approximately 5% of orders when security analytics detect clues that the orders may be fraudulent. While this may not seem like a large amount, 80% of the suspected fraudulent transactions are actually from legitimate customers who have been incorrectly flagged.
 
Inaccurate fraud screening leads to a significant loss in revenue, so how can e-tailers assure authentic customers are not blocked from making purchases?

Leverage a Collective Trust Intelligence Network
To differentiate between authentic and fraudulent transactions, e-commerce merchants can leverage collective data from a global intelligence network comprised of device identification characteristics, user and persona profiles, past behavior, detected relationships and threat assessments. Specifically, retailers can link customer accounts to their devices, addresses and previous transactions to build a history of legitimate customers and suspicious accounts.
 
Leveraging a collective network enables e-commerce merchants to analyze logins, payments, new account registrations and remote access attempts and evaluate the data relating to both the user and their associated devices from all channels, including desktop, laptops, Web browsers and dedicated mobile apps. Doing so can help protect against the following cybercrime threats:

1. Account Takeover
   While this threat traditionally targeted financial service providers, it is an increasing risk for e-commerce merchants. Using a collective network, e-commerce merchants can spot red flags, including multiple devices accessing one account, spoofed browser settings and suspiciously changing account data such as billing or shipping addresses. Such technology can also protect customers from malware targeting credit cards online and protect against automated logins from bots and compromised devices.
    
2. Payment Fraud
   E-commerce merchants must implement verification technologies to assure transactions are authentic. However, such verification may inconvenience authentic customers. A network of collective data about prior transactions and device behavior can help e-commerce merchants reduce false negatives – incorrectly labeling an authentic transaction as fraudulent – and avoid additional screening for trusted personas and devices.

While online payment fraud and account takeover protection should be a top priority for e-commerce merchants given the significant amount of revenue lost to cyber criminals today, it’s also important to assure returning and authentic customers have a frictionless shopping experience. Without collective intelligence to differentiate between trusted and suspicious personas, devices and behavior, authentic customers who are placed through arduous screening processes will turn to competing retailers who offer a more convenient shopping experience.
 
Alisdair Faulkner is chief products officer and co-founder at ThreatMetrix, responsible for product management and strategy.