Frauds are big and damaging! With the ever-increasing online payment fraud rates, it is crucial to monitor credit fraud. But online business owners and merchants are in a prisoner’s dilemma because of these frauds.
“The single biggest existential threat that’s out there, I think, is cyber.”
Michael Mullen, Former United States Chairman of the Joint Chief of Staffs
Credit card fraud, a form of identity theft, is one of the fastest-growing frauds in the e-commerce industry. Due to the absence of a physical credit card, online merchants cannot verify the card thoroughly, thereby falling prey to system fraud.
The coronavirus pandemic hasn’t helped in any way either. Did you know that credit card fraud spiked by 35% due to the pandemic caused by the virus alone?
But what dilemma do online merchants face? Why are some businesses ignoring fraud detection services? And how can MerchantRMS help your business in these aspects? Let’s find out!
Prisoner’s dilemma is a form of game theory that talks about a scenario in which two individuals or parties are in a difficult situation or conflicted. In simpler words, they are provided with two options:
Naturally, the best outcome for any scenario would be to achieve the optimal solution at all times. But the catch here is that either party doesn’t know what the other’s intentions are and what they would finally decide.
Because of the lack of knowledge of the other party’s thoughts, both tend to choose the personal incentive for themselves but end up with a much less desired solution in the end!
The Prisoner’s Dilemma theory can be applied to online businesses and frauds as well. Here’s how.
There are many possible prisoner dilemma scenarios that business merchants face.
Paul is an online merchant who sells high-quality electronic products. Sara is also an online merchant who sells the same kind of products as Paul.
Both are aware of fraud threats in the payment gateway. If they plan on fighting the fraud, they might have to alter their services to compensate for the added expenditure. This is where the prisoner’s dilemma kicks in.
In the first case, Paul protects his business from fraud attacks but loses his customers in the process. Similarly, in the second case, Sara gains payment fraud protection but ends up losing her customers.
In the third case, both retain their customers but leave themselves open to fraud attacks. The last one is the most ideal scenario as both safeguard themselves from fraud. And as their ROI also looks similar, they both retain their customers.
Credit card fraud can lead to double the loss in the form of chargebacks as well. So naturally, it is most logical to fight and monitor credit fraud, right?
Well, customers (loyal and new) are the most important assets for any business. No business merchant would want to do anything to affect their customer base. This is what creates a shadow of doubt in business merchant’s minds.
Online business merchants also face a dilemma when they fall prey to triangulation fraud.
As the name suggests, three people are part of the triangulation fraud. Here is how this fraud takes place.
When a fraudster commits fraud, they are more interested in getting money rather than a product. In triangulation fraud, the fraudster gets the money, and the customer gets their product at a cheaper rate. But the merchant is at the biggest loss, as they lose their product and face chargeback losses.
In such situations, merchants face a dilemma:
Merchants can stop online payment fraud in their business by integrating a fraud detection system into their business. However, some merchants are still skeptical about working with a fraud detection system. These are a few reasons why.
In fraud detection in online businesses, inaccurate decisions by the system can prove to be a massive loss because inaccuracy leads to false declines and acceptance of fraud cases. This causes a loss in customers and business.
Visibility and transparency are essential aspects of fraud detection. But some merchants are worried about the lack of transparency that few fraud prevention platforms offer.
For better results from the online fraud protection system, a huge dataset is required that gives information on various factors and dynamics. Providing such huge chunks of data might waste time, money, and resources.
Regardless of the reason or the dilemma, MerchantRMS is your solution for fraud protection. Using state-of-the-art tools, MerchantRMS saves your business from all kinds of frauds and fraudsters.
We not only monitor credit fraud using the credit card details but also analyze, monitor, and track other information like device and email ID used in the transaction to find connections between seemingly unrelated ones.
MerchantRMS delivers highly accurate results and enhanced fraud detection. With millions of email IDs recorded in our database along with history of chargebacks, our system processes transactions at a much faster pace.
With our iDashboard, we offer complete transparency into all transactions. You can gain access to all the transactions that are accepted, rejected, sent for manual review, and a lot more. From the dashboard, you can also gain insights that can help you make better decisions.
Some fraud protection platforms use machine learning to detect fraud. Our Reviewer Assistant uses data from previous transactions and learns about the various factors impacting them. It then uses this data and gives guidance on improving your rules and variables.
With MerchantRMS, you can also monitor credit fraud and analyze everything through detailed online fraud reports on the transactions, pre-set rules, devices, etc.
With the amount of credit card fraud cases rising and fraudsters setting up fake storefronts, you must get a fraud detection system for your online business to monitor credit fraud.
MerchantRMS’s advanced fraud elimination system can help you prevent, monitor, and analyze all kinds of frauds that occur on your platform. Contact us at our RMS Canada center or feel free to email or call us today!
Fraud can upset the financial scales of your company and dent your business’s reputation. Fraud detection helps you find and eliminate any fraud attempts on your business to safeguard you.
MerchantRMS uses top-notch fraud detection technologies to deliver high-quality results when it comes to finding fraudsters.
You can easily monitor credit fraud using fraud prevention and fraud management systems like MerchantRMS, which provides data analytics and insights on all the transactions that occur on your platform.