The development of companies in terms of electronic commerce (e-commerce) has meant a great advance for their economy. However, it has also triggered fraud in online transactions. So in an attempt to combat these frauds, companies reject a large number of secure transactions.
This type of action, rejecting legitimate sales, is becoming a more costly problem than fraud itself, because, according to Vesta, a world leader in prevention of digital fraud and improvements in the approval of transactions, the seller of Average ecommerce spends nearly $ 4 fighting fraud for every dollar of direct fraud loss.
Risk of suffering e-commerce fraud
Any business that accepts payments online is at risk of fraud. For example, the 2020 . Payment Fraud and Control Survey found that 81% of organizations were targeted by payment fraud in 2019. Also, according to Review 42, card-not-present fraud ( CNP) will increase 14% by 2023. Additionally, online and card-less transactions have increased during the COVID-19 pandemic; experts predict that this trend will increase 21 percent in 2021.
In Mexico, in accordance with the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF). Cyber fraud grew 35% in the first quarter of 2019 compared to the same period of 2018. In addition, it estimates that CNP fraud will have cost retailers $ 130 billion dollars from 2019 to 2023.
The e-commerce market, and therefore the risk of fraud, is very large in our country. In 2020, the Good End campaign generated $ 239 billion pesos in total sales (107%. More than in 2019) and 188.5 million transactions were registered (157% more than the previous year). Online sales represented 15.2% of total sales, that is, just over $ 36 billion pesos. Which means an increase of 225% compared to 2019.
While shopping online is very popular, this format significantly increases the risk of fraud. In 2020 alone, CNP fraud cost companies $ 35.54 billion worldwide. Significant increases in fraud attacks are causing huge losses for mid-tier to enterprise businesses.
In Latin America, companies have the possibility of having Artificial Intelligence business services that provide the necessary infrastructure to protect themselves from fraudulent transactions and save the large costs they generate.
One of the leading platforms is Vesta, which began in 1995 as a pioneer in processing fully guaranteed CNP payment transactions for the telecommunications industry. Since then it has expanded its position as a leader in secure digital payments.
Vesta is the only machine learning fraud fighting platform built on 25 years of global data sourcing on the world’s largest mobile networks.
Its proprietary fraud awareness graph makes real-time connections between 2 trillion data points to perform an accurate risk assessment in milliseconds.
Vesta’s models are so accurate that they approve more than 97% of all e-commerce transactions and bear 100% of the cost of fraud for any approved transaction. As a result, Vesta reduces the cost of fraud to zero.
Evolution of e-commerce and transactions
The evolution of online payment solutions is inevitable, digital payment trends promise safer and faster transactions. On the other hand, bank cards are struggling to maintain control of the payments market in 2021. However, they face increasing competition from technology companies that are adding more and more payment solutions to their platforms.
In this regard, some online payment trends for 2021 are contactless digital payments, biometric credit cards, and a greater focus of Fintech companies on business-to-business (B2B) transactions.
For all these forms of online payment, artificial intelligence solutions focus on detecting fraud before completing transactions, which reduces your operating costs and offers benefits such as:
Identification of fraudulent charges: Artificial intelligence makes it possible to distinguish between fraudulent and legitimate transactions.
Identity Theft Prevention – Customer verification helps prevent inadvertent disclosure of personal information and fraudulent transactions.
Fraudulent Marketing Scam Prevention – Criminals can hijack company advertising and use it in their scams. Once again, artificial intelligence can monitor these tactics and protect the company’s ad space.
Decrease in false positives: If companies’ fraud detection systems lack adequate sensitivity, they run the risk of rejecting legitimate customers.
It is important that there are companies like Vesta that are dedicated to explaining to companies the nature of electronic fraud and thus taking the necessary precautions.