CNP Expo Panel: Merchants ‘Never Too Small’ to Think about Fraud 

May 22, 2012

The CNP Expo continued its educational tracks on Monday with another examination of fraud. In one of the centerpiece general sessions of the entire conference, a panel of seven experts moderated by president and founder Steve Casco discussed the issues merchants should consider when choosing a fraud screening solution.

One of the first things a merchant should do, before beginning to examine vendors, is take stock of the current business environment and where a company wants to be in regard to its fraud program, said Jim Rice, director of market planning for the retail/e-commerce market with LexisNexis Risk Solutions.

“Look at what you’re doing and see what’s working and what’s not working,” said Rice. “Then assess where you want to go. What is your growth strategy? Is it going to be online? How are you going to manage that? Then you need to look at your fraud solutions and make sure they fit with what your strategy is.”

Members of the panel also generally agreed that even small merchants should be concerned with fraud and with establishing a robust anti-fraud program.

“You’re never too small to start,” said Phil Levy, vice president of e-commerce solutions for First Data. “Don’t get wrapped up in the fool’s gold that it’s all about top-line [e-commerce sales]. Sooner or later you’re going to have a bad bottom-line experience and the smart organizations get ahead of them.”

At least one anti-fraud technology provider on the panel, however, acknowledged the challenges small merchants have in implementing solutions that can be costly.

“There’s a reality out there we have to deal with as well,” said Max Anhoury , vice president of global sales for iovation. “We would all love to see the small merchant take the super-proactive stance and build a platform today. But, what we see in practice is typically smaller merchants will look for one solution they can implement right away that’s relatively inexpensive.”

Anhoury said fraud managers are probably going to invest at a level commensurate with the kind of risk the company is currently exposed to, not some level of risk the company might face in the future.

There is no shortage of alternatives for merchants to choose that can limit their exposure to fraud. The question, Levy said, is how a company uses them in combination as part of a comprehensive anti-fraud program.

“We partner with several of the firms here,” said Levy. “Our view of the world is that there are plenty of good fraud tools out there. It’s how you bring them all together to meet your particular business requirements.”

Fraud, and the many ways merchants can combat it, has been a central emphasis of the education program at the CNP Expo this week in Orlando. Four of today’s 12 general or track sessions deal with CNP fraud in some way.