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Treasury

E-commerce verification processes face regulatory pitfalls

E-commerce protection measures often focus on how to safeguard the consumer, but merchants also need security to counter the threat from fraud.

Merchants are wary of the level of exposure they face from e-commerce transactions. Hacks can lead to heavy fines and reputational damage, while fraudulent transactions can lead to loss of revenue.

There are a number of ways in which payments companies are helping these merchants to reduce the risk of loss of earnings due to fraud. Daniel Kornitzer, chief product officer at digital payments provider Paysafe, says there is often a defined pattern of behaviour that is flagged up when fraud is taking place on an account. 

“Fraudulent transactions will often have suspicious characteristics, such as repeated logins, unusual addresses or unusual payment amounts, and overuse of odd or free email addresses,” he says. “These anomalies can be spotted by analysing a merchant’s order and transaction data. Acquirers can also help by notifying a merchant of suspicious chargeback and authentication activity.”

 Daniel Komitzer

 Daniel Kornitzer, Paysafe 

Kornitzer says that payments have remained vulnerable to attacks despite all of the processes now in place to check the validity of transactions. There are, however, a range of signifiers that are unique to the individual, and any variations outside of this can also be a sign of fraud. 

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