Fintech Insights

Fighting fraud with end-to-end payment protection

Jeremy Bellino | senior fraud and authentication manager, Worldpay from FIS

May 21, 2021

A leading expert in payment e-commerce fraud and authentication looks at how merchants are preparing for the future of fraud protection across the entire payment life cycle.

In 2020, merchants faced a substantial rise in payment fraud. Already at concerning levels, e-commerce, new account and chargeback fraud all rose in the wake of COVID-19.

Fraudsters stepped in to capitalize on the pandemic’s disruption. Merchants took a direct hit, according to a new report by Worldpay from FIS® and Forrester Research. Nearly 9 in 10 firms surveyed lost revenue due to payment fraud in 2020, while 59% of merchants surveyed reported higher card-not-present fraud.

Challenges with e-commerce fraud are present across the entire payments life cycle. Pre-transaction authentication, fraud detection, fraud mitigation and post-transaction chargeback management are all vital to combatting bad actors and protecting revenues. Merchants that are successfully defending their revenues against fraud threats are deploying dynamic strategies that prioritize end-to-end payment protection.

These were just some of the findings in the new Worldpay from FIS Global Payment Risk Mitigation Report.

Deploying e-commerce fraud prevention

Global merchants deploy a patchwork of risk management solutions today, ranging from best practices to no practices. The good news is that most merchants (96%) use some form of fraud management technology to protect their payments.

However, only one in four merchants surveyed are protecting their entire payments life cycle by using fraud management tools in conjunction with authentication, tokenization and chargeback solutions.

Creating safe, easy and convenient payment solutions for customers and protecting hard-earned revenues from fraud are two sides of the same coin. Having robust solutions in authentication, tokenization or chargeback solutions represents only one piece of the revenue protection puzzle.

Merchants should strive to provide frictionless checkout experiences while protecting their revenue from fraud through integrated end-to-end security infrastructure.

The ROI of fraud prevention

Merchants understandably seek concrete returns on investments in their payment security infrastructure. Merchants want to reduce losses from fraud, lower false positive rates and improve payment authorization rates to ensure safety and positive experiences for legitimate customers.

Achieving that return from payment security infrastructure investments is a reality today for many merchants that approach payment security as a holistic challenge. E-commerce fraud mitigating solutions should strive to strike the right balance between managing risk and enhancing consumer experience.

That balance is best achieved when all components of payment protection are integrated across the enterprise. End-to-end payment protection is more than just a sound technical strategy for fighting fraud. Dynamic end-to-end protection solutions deliver real return on payment security infrastructure investment.

Protecting e-commerce payments – as a whole

By improving security solutions and capabilities, organizations plan to increase the number of approved payment transactions, improve reputations, reduce monetary losses from fraudulent behavior and improve customer satisfaction.

Each component of the payment life cycle is significant. That cycle starts with a hybrid e-commerce fraud detection model that leverages machine learning in combination with a rules-based strategy optimized to address specific fraud pain points. Secure customer authentication is essential to reduce risk, increase security and provide seamless customer experiences. A chargeback management solution that combines an API with easy-to-use portal functions can help merchants save time and money.

To learn more about the landscape of fraud merchants face today and how they’re fighting back with dynamic end-to-end payment protection solutions, visit the Worldpay from FIS 2021 Global Payment Risk Mitigation Report.