Making the decision to take your eCommerce business global can be a lucrative one, but also introduces a higher risk of fraud attacks. In this article, learn how to protect your business from fraud when selling internationally.
There's no better time to start an eCommerce business than now. It’s estimated that there will be 2.14 billion global digital shoppers in 2021. That number is only projected to increase as a growing number of consumers switch to using online channels to purchase essential products.
However, along with this increase in consumer spending, there's been a dramatic spike in card-not-present (CNP) fraud. Global CNP fraud has tripled, increasing from $9.84 billion in 2011 to $32.39 billion in 2020. It's estimated that by 2027, payments fraud will have cost merchants $40.62 billion—a 25% increase over 2020.
The risk of fraud is even greater for cross-border eCommerce businesses that choose to sell their products or services internationally. In this article, we'll look at the primary challenges associated with cross-border eCommerce fraud prevention, and provide specific tactics you can use to protect your business from the threat of fraudsters.
What Are the Primary Challenges of International Fraud Prevention?
By no means is cross-border eCommerce fraud prevention an easy task. There are numerous challenges that business owners across every industry face, and these can be difficult to accommodate if you don't have the proper tools and knowledge to do so.
Listed below are some of the most critical challenges to keep top of mind.
Blacklisting Entire Countries or Geographic Regions
Certain regions of different countries are often hotspots for international fraud. However, this doesn’t mean that every transaction made from these locations is fraudulent. If you blacklist an entire region, you run the risk of missing out on a large number of potential sales.
Rather than declining orders from high-risk countries or regions, you should look for a fraud protection platform that has a proven track record of successfully stopping fraudulent transactions in foreign countries.
Your Current Fraud Tools May Be Insufficient
Unfortunately, it’s fairly common for eCommerce business owners to implement insufficient fraud detection tools. This is particularly true when it comes to international fraud, something that is often more complex than the average compromised account.
The most common scenario involves business owners who utilize free fraud prevention tools. Although these are available at no cost, they can actually end up costing your business more money in the long run. Oftentimes these tools rely on strict rule-based decision making and will result in an increased number of false declines for your business.
If you're seeking an accurate fraud prevention solution, look for a platform that utilizes machine learning to adapt to new fraud trends and anomalies in transaction data. Vesta fights fraud with machine learning backed by 25 years of global data across the world’s largest mobile networks.
This approach to fraud prevention means our risk detection models are constantly adapting to new threats on a global scale, drawing data from millions of transactions every minute.
How Can I Improve My International Fraud Prevention Strategy?
It’s not as difficult as you might think to improve your cross-border fraud prevention strategy. It’s also an obligation that you should continually strive for, as there are always new threats and fraud trends emerging.
Here are a few actionable tactics you can use to bolster your strategy.
Consider User Payment Info and Activity
It’s already been established that certain geographic locations are more likely to participate in fraudulent behavior. However, you should also consider payment information as well.
For instance, let’s assume that a credit card that has never been used before on a user account is then leveraged to make a large purchase. This is often a red flag since criminals will use compromised financial info when making purchases online.
This is particularly concerning if a new credit card is used to make a purchase that is shipped to an international address.
Leverage Artificial Intelligence + Machine Learning
In many cases, it’s simply impossible to fully protect yourself against fraudulent behavior without artificial intelligence and machine learning. You’ll often find that far too many cases slip through the cracks.
By leveraging Vesta's fraud prevetion solutions, you’ll be able to implement an automated system that both detects fraud and learns from past transaction data to delivery more accurate and reliable results.
Cross-Border eCommerce Fraud Prevention is Essential
Since even one case of fraud can be potentially crippling, it’s in your best interest to implement these fraud prevention tactics as soon as possible. Afterward, you’ll be able to ensure that your company remains fully protected.
You can check out this resource to learn more about the end-to-end fraud solution that we offer our clients. This tool incorporates artificial intelligence and machine learning in order to detect fraudulent behavior as accurately as possible.
Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.