Last week, the Whitepages Pro team attended the CNP Expo in Orlando, Florida. We had a successful few days meeting with merchants and discussing how our award-winning global real-time identity verification data can help reduce fraud and fulfill good orders faster.
Throughout our conversations, there were five trends that are impacting the card-not-present space:
Merchants are shifting their focus from reducing fraud to reducing false positives, in order to increase sales. However, tracking false positives is an obstacle that many merchants are facing, and not a simple one to tackle. One tactic of tracking false positives that merchants have found useful is creating a feedback loop with their customer services center, this allows them to track calls about the declines and discover potential trends in why customers were falsely declined. Beyond working with the customer service teams, it’s important to invest in your fraud team by providing them the tools and identity data they need in order to get a full understanding of your customer before the decline takes place.
We met with many merchants selling digital goods, such as gift cards, tickets, mobile payments, etc. With digital goods it’s critical to make real time decisions, leaving little time for manual review. However, in some digital goods use cases, there’s also limited data collection, making it challenging to make quick decisions. One solution to battling the fraud vs. time compression dilemma is to use fast, accurate, data in combination with machine learning and rules based systems to make more informed decisions in fractions of a second.
Merchants are finding success looking at other parts of the customer journey in order to get ahead of fraud. Instead of waiting until the payment to identify fraud, merchants are looking at how they can utilize fraud platforms, data vendors, and behavior companies to determine fraud earlier in the customer journey, such as during the account opening process. Whitepages Pro, for example, has been approached by multiple merchants looking for phone or email validation products at the top of the waterfall.
For physical goods merchants, buy online pick up in store (BOPIS) and freight forwarders were big topics of conversation. BOPIS is a unique challenge for merchants, as someone different than the billing persona could easily be picking up the package a different individual ordered for them. There is a stricter SLA on approving these transactions, and it’s hard to coordinate with the in-store staff to validate the transactions are indeed for good customers and not fraudulent. Using data such as phone number, customer billing address, and IP address, combined with Address Verification System (AVS), Card Verification Value (CVV), and order history has helped one of our customers successfully review BOPIS orders.
Some merchants are weary of shipping and expanding internationally, which has forced global consumers to utilize freight forwarders in order to receive the products they desire. The problem is, so are fraudsters. Merchants can combat the freight forwarder issue by utilizing global identity data in order to confidently sell cross-border, as well as look at address data to determine if a location belongs to a reshipper or freight forwarding company.
As fraudsters continue to get more sophisticated, merchants need to look at new technologies in order to stop them. Tools such as behavior biometrics, device ID, and velocity tracking are just a few of the useful technologies that are helping merchants detect fraud. However, using one technology to make decisions is not enough–merchants must layer different technologies in order to have a successful fraud strategy. In Gartner’s new “Market Guide for Identity Corroboration and Proofing,” Gartner introduces the concept of the “identity corroboration hub” that focuses on orchestration, analytics and context-base decisioning. They state an identity corroboration hub should have integration of multiple third-party data tools, which should include solutions or data sources related to at least two of these four: real-world identity corroboration, digital attribute risk assessment, navigation and other behavior analysis, and digital or real-world reputation and link/graph analysis.
We look forward to continuing conversations with CNP merchants about these topics and helping them #FightFraudlikeaPro. To learn more about our real-time global data, machine learning, and network insights, contact us here.