May 31, 2016
CNP Session Room: Evaluating Fraud Solutions
The wide variety of antifraud solutions available from third-party providers means merchants must be careful when choosing one for their company. Panelists at a session on the 2016 CNP Expo’s final day agreed that as companies get larger, they may outgrow in-house fraud prevention systems.
Identifying the specific problem that needs to be solved is the most important step for any merchant in choosing a solution, each panelist emphasized. For Jonas Cooper, CTO of Lethal Performance, which makes and sells parts for Ford Mustangs, it was battling unnecessary declines.
“Traditionally, we have pretty low fraud rates but a high average order value, so any fraud is painful,” Cooper said. “The biggest thing for us wasn’t an increase in fraud. Our biggest problem was not inconveniencing our customers, but we were getting a lot of false positives.”
While digital services marketplace Fiverr, whose average ticket is low, had a different problem, according to Gali Gelber, head of trust and safety.
“Fraudsters were trying to test the card on us and then go buy a Rolex somewhere else,” Gelber said. “We found it a little more difficult to identify collusion. We knew we could not deal with this kind of volume in house.”
Whatever the problem, panelists agreed, when looking for a vendor to provide security, be methodical. Laura Park, sales operation specialist for Macsales.com, a 27-year-old company that makes and sells part for Macs, recommended merchants find a variety of providers that fit their needs then test them by running real transactions.
“Make a list of your pain points, what you really need to solve for,” Park said. And, she had some advice for vendors in the room as well as merchants. “The other big thing we were looking for was the service aspect. If I feel like I know more than your sales rep, we’re done.”
Do your own research, added Cooper, who talks with friends in his industry and checks out products thoroughly before purchasing a solution. And stay focused on your requirements, he said.