As eCommerce businesses continue to grow, so does the risk of fraud. In order to protect their customers and themselves, business owners need to be proactive about fraud detection.
Fortunately, there are a number of software and tools available that can help.
Using e-commerce fraud detection software and tools, businesses can develop sophisticated fraud detection systems that can flag potentially fraudulent activities in real-time.
These systems consider many factors, including the customer’s location, the type of purchase being made, and the customer’s past buying history. In addition, businesses can use data from social media and other online sources to help identify potential fraudsters.
Check out our list of the top eCommerce fraud detection software and tools, and find the right solution.
Ecommerce Fraud in the Business World
Ecommerce fraud occurs when a person illegally obtains or uses another person’s personal information, such as credit card numbers or bank account details, to make purchases online.
Ecommerce fraud can also occur when a person uses someone else’s personal information to set up an online account in their name and make unauthorized transactions.
In some cases, eCommerce fraud may also involve the use of malware to infect a victim’s computer and gain access to their personal information. Ecommerce fraud is a serious problem that can cause financial losses for both businesses and consumers.
According to Statista, there were more than $20 billion reported losses from eCommerce fraud in 2021, this is a 14% increase when compared to the previous year. This increase is partly due to the growth of online shopping and the ease with which criminals can commit these crimes.
Types of Ecommerce Fraud
E-commerce fraud can come in many forms. Here are six of the most common types of fraud:
Credit Card Fraud
Credit card fraud is the most common type of e-commerce fraud. This occurs when a criminal uses someone else’s credit card details to make unauthorized purchases online.
Credit card fraud can also occur when a criminal uses a stolen credit card to make purchases, or when they create a fake credit card using someone else’s personal information.
Credential Stuffing
Credential stuffing is a type of fraud that occurs when a criminal uses a list of stolen username and password combinations to gain access to people’s online accounts.
Once they have access to these accounts, they can make unauthorized purchases or steal sensitive information, such as credit card numbers and bank account details.
Phishing
Phishing occurs when a criminal uses fake emails or websites to trick people into revealing their personal information, such as credit card numbers, bank account details, or login credentials.
Phishing attacks can also be used to install malware on a victim’s computer. This malware can then be used to steal sensitive information or make unauthorized purchases.
Account Takeover
Account takeover is when a criminal gains access to someone’s online account and uses it to make unauthorized purchases or steal sensitive information.
In most cases, an account takeover happens when a criminal uses stolen login credentials to gain access to an account. However, it can also occur when a criminal uses malware to take over an account.
Friendly Fraud
Friendly fraud is when a customer makes a purchase and then asks for a refund, even though they received the product or service they purchased. In some cases, friendly fraud may occur because the customer is not happy with the product or service they received.
In other cases, it may be because the customer forgot they made the purchase.
Friendly fraud can also occur when a customer makes an unauthorized charge on their own credit card and then asks for a refund from the merchant.
The Best Ecommerce Fraud Detection Software and Tools
Several different software and tools are available to help businesses detect and prevent eCommerce fraud. Here are seven of the best:
1.DataDome
Source: DataDome
DataDome is an eCommerce fraud detection software that uses real-time AI to protect against online fraud and bot attacks. It provides powerful threat analytics and notifications to help keep your business safe. Its enhanced user experience for all endpoints ensures a smooth customer experience.
It offers enhanced protection against account takeover, credential stuffing, fake account creation, and server overload, making it an essential tool for any business serious about protecting its online presence.
Some retailers who trust DataDome to keep their businesses safe include Tripadvisor, Reddit, Asus, and The new york times. With DataDome, you can rest assured that your business is in good hands.
Pricing: From $2,990 to $5,990 per month
Notable Features
- Unmatched customization option
- Powerful analytics tools
- Bot protection on autopilot
- Cordless SDK integration
- Machine learning
- Anomaly Detection
- Attack mitigation
Summary
DataDome is a cutting-edge eCommerce fraud detection software that offers IT alerting, 24/7 customer support, and secure endpoint protection against vulnerability scanning.
DataDome’s artificial intelligence technology is constantly learning and evolving, making it the most effective fraud detection solution on the market. With DataDome, you can be confident that your online business is safe from fraudulent activity.
Watch Out For: Technical know-how is needed for implementation.
2. Kount
Source: Kount
Kount is an eCommerce fraud detection software that uses machine learning to identify fraudulent activities. It considers various factors, including customer location, purchase history, and device information, to prevent losses due to fraudulent activities.
Kount’s machine learning technology is constantly evolving, making it more effective at detecting and preventing fraud.
Some world’s leading companies, such as Moneris, Barclays, Chase, and staples, trust Kount to keep their businesses safe from fraudsters.
Pricing: Available on request.
Notable Features
- Automate transaction decisions
- Protect against account takeover
- Decrease false positives
- Enhance customer insights
- Advanced artificial intelligence
- Machine learning
- Chargeback protection
- Data security
Summary
Kount is an eCommerce fraud detection software that helps businesses to block digital payments fraud and account takeover in real time.
The software provides businesses with access to payment data, location ID data, and digital identifier data, which can be used to customize risk thresholds and achieve desired business outcomes.
In addition, Kount’s identity trust decisions are based on various factors, including previous purchase history, device ID, and IP address. As a result, businesses can confidently block fraudsters while approving legitimate transactions.
Watch Out For: It has no social media profiling.
3. Signifyd
Source: Signifyd
Signifyd offers real-time decision-making about orders, so you can automate fulfillment for legitimate customers while proactively blocking fraudsters. Signifyd is financially secure – even if its software permits a fraudulent transaction, you won’t miss out on money.
By analyzing customer location, purchase history, and shipping information, Signifyd can quickly and accurately identify fraudulent orders. This allows businesses to automate fulfillment for legitimate customers while proactively blocking fraudsters.
In addition, Signifyd is fully committed to protecting the security and privacy of your data. To that end, Signifyd follows industry standard data security frameworks and best practices.
This includes compliance with CCPA, LGDP, and GDPR requirements. as a result, you can be confident that your data is safe with Signifyd.
Pricing: $1,500 per month; a free trial is available
Notable Features
- Automated recommendations
- Blackbox machine learning
- Seamless SCA
- Account protection
- Revenue optimization
- Abuse prevention
- Payment optimization
Summary
Signifyd is a provider of Guaranteed Fraud Protection for eCommerce. It makes it easy for merchants to regain control of their fraud management and get back to growing their businesses.
Plus, with Signifyd’s Agent Console and Insights Reporting, merchants can get the data they need to monitor their business performance.
Our world-class customer success team, flexible technology, and extensive library of pre-built integrations make Signifyd the easiest fraud management solution to implement.
That’s why some of the world’s leading retailers trust Signifyd to power their Guaranteed Fraud Protection, including Samsung, Walmart, Wish, Lacoste, and Carbon38.
Watch Out For: It has no social media profiling.
4. Arkose Labs
Source: Arkose Labs
Arkose Labs is an eCommerce fraud detection software that uses advanced bot mitigation technology to protect businesses from automated attacks. The platform is fully supported by a 24/7 SOC and backed by an industry-first $1 million warranty on account protection.
This means that businesses can have peace of mind knowing that their website is protected from sophisticated bot attacks.
Leading businesses, including Microsoft, Roblox, PayPal, Honey, Zilch, and Pitney Bowes, trust Arkose Labs for its platform’s ability to get rid of advanced bots, annoy fraudsters, and simplify protect online consumer interactions.
Businesses can use Arkose Labs to protect their bottom line and ensure a positive customer experience.
Pricing: Available on request.
Notable Features
- SLA guarantee
- Arkose detect
- Arkose protect
- Arkose labs
- Credential stuffing warranty
- Bot mitigation
- Real-time monitoring
- Whitebox machine learning
Summary
The company’s software uses machine learning to detect and prevent fraudulent activities such as account takeover, carding, and identity theft. Arkose Labs’ software uses various techniques to detect fraud, including risk scoring, anomaly detection, and behavioral analysis.
The software is designed to be highly accurate, with a false positive rate of less than 1%. The company’s software is used by some of the world’s largest online retailers and financial institutions.
Arkose Labs has a team of experienced data scientists and engineers constantly improving the software’s accuracy.
Watch Out For: A monitoring team is needed to run the software.
5. Seon
Source: Seon
Seon builds a digital footprint by conducting in-depth background checks using data points from over 50 internet and social media platforms. SEON’s lightweight JavaScript code snippets are simple to include in web apps for device identification.
With its SDKs, mobile applications for the iOS and Android platforms may be integrated seamlessly. Seon is unlimited in customizing, machine learning, and behavior analytics.
Pricing: From $299 per month with a 14-day free trial.
Notable Features
- Unlimited customizing
- Machine learning
- Behavior analytics
- Digital and social media lookup
- Bespoke risk scores and rules
- Whitebox machine learning
- Social media platform lookup
- Address profiling
Summary
Seon’s flexible integration options, including API integration via code, make it easy to incorporate into your existing system. Seon can block unwanted transactions and refuse purchases made using stolen cards or login information, protecting your business from loss.
It also provides all the resources necessary to investigate erroneous refund and chargeback claims, helping you meet chargeback ratios required by card networks.
With the analysis of your digital trail, Seon can detect phony accounts and stop individuals using stolen or fraudulent identification from taking advantage of promotional offers.
Watch Out For: The customer support is not too good.
6. Cybersource
Source: Cybersource
Cybersource is a leading provider of eCommerce fraud detection software and tools. Their products are used by some of the largest online retailers in the world, and they have a proven track record of delivering accurate and reliable results.
Cybersource’s products are designed to help businesses minimize fraud and maximize profits, and their team of experts is always available to help customers troubleshoot any issues that may arise.
In addition to its software products, Cybersource offers a wide range of consulting and advisory services designed to help businesses reduce fraudulent activity and improve their bottom line.
Pricing: Available on request.
Notable Features
- Payment acceptance
- Fraud and risk management
- Payment security
- Behavior tracking
- User authentication
- Address profiling
- Data Intelligence
- Machine learning
Summary
Cybersource provides eCommerce fraud detection software and tools that help businesses prevent fraud, capture more revenue, and lower operating costs. The software filters out bad payment transactions, saving businesses time and money.
In addition, the software helps businesses grow by detecting fraud and providing detailed reports. By using Cybersource’s software, companies can protect themselves from fraudsters and improve their bottom line.
Watch out For: Cybersource’s lengthy and pricey contracts may hinder small to medium stores.
7. Nethone
Source: Nethone
Nethone is an eCommerce fraud detection software that uses cutting-edge machine learning technology to detect and prevent fraud. Nethone Guard, the company’s flagship product, uses Profiler technology to collect over 5000 data points from each user, including social network profiles.
These data variables are used to generate a risk score that helps determine the authenticity and intents of customers. Nethone’s machine learning algorithm is constantly evolving and improving, making it one of the market’s most effective fraud detection tools today.
Notable Feature
- Whitebox machine learning
- User profiling
- Easy integration
- Strong documentation
- Dedicated data scientist
- Real-time effectiveness
- Device fingerprinting
- Device tracking
Summary
Nethone uses data from past transactions to identify patterns that may indicate fraud. For example, Nethone may flag a transaction as fraudulent if it is being made from a new IP address or if the billing and shipping addresses are different.
Nethone also offers tools to help businesses recover lost revenue from chargebacks and fraud-related fees. By using Nethone, businesses can reduce their exposure to online fraud and protect their bottom line.
Watch Out For: Do not make use of social media platforms.
Features to Consider When Choosing Ecommerce Fraud Detection Software and Tools
Ecommerce fraud is an ever-present risk for businesses that sell online. To reduce the chances of fraud, choosing eCommerce fraud detection software that suits your needs is vital. Here are some of the key features to look for:
Device Fingerprinting
This technique is used to identify devices that have been used to commit fraud. By matching the fingerprints of devices used in previous fraudulent transactions, businesses can flag up potential fraudsters and block them from making future purchases.
Social Media Lookup
Allows businesses to check whether the name and contact details provided by a customer match those on their social media profiles. This can be an effective way of spotting fake accounts created solely to commit fraud.
IP Analysis
IP analysis involves checking the IP address of a customer against a database of known fraudsters. This can help identify customers using proxy servers or VPNs to conceal their actual location.
Machine Learning
Machine learning is a form of artificial intelligence used to detect patterns in data that may indicate fraud. By training a machine learning algorithm on past data, businesses can create a system that can automatically flag up potentially fraudulent transactions.
Customization
Customization refers to the ability of businesses to tailor the features of their eCommerce fraud detection software to their specific needs. For example, a company selling high-value items may wish to set up additional security measures, such as two-factor authentication, for customers attempting to make large purchases.
BIN Lookup
This Is a method of checking whether the bank issuing a customer’s credit card is on a list of known issuers of stolen or fake cards. If the bank issuing the card is on the BIN lookup list, the transaction should be fraudulent and blocked.
These features are just some of the many eCommerce businesses should look for when choosing fraud detection software. By considering these features, companies can select a solution that is well-suited to their needs and can help them to reduce the chances of falling victim to fraud.
The Benefits of Using Ecommerce Fraud Detection Software and Tools
When navigating the world of online commerce, having a solid fraud detection system in place can make all the difference. Here are eight benefits of using eCommerce fraud detection software and tools:
Enhanced Security for Customers’ Sensitive Information
Implementing an eCommerce fraud detection solution helps to encrypt customers’ sensitive information, ensuring that it is better protected from cybercriminals. This, in turn, enhances customer trust and loyalty, as they know that their data is in good hands.
Improved Trust and Credibility in the Eyes of Consumers
ECommerce fraud detection tools help to improve your company’s trust and credibility in the eyes of consumers. This shows that you are taking the necessary steps to protect their information and keep them safe from fraudulent activity.
Reduction in Chargebacks and Financial Losses
Stopping fraudulent activity before it happens can help reduce the number of chargebacks and financial losses incurred by your company. This is because you will be less likely to refund customers who have been scammed or defrauded.
Business Improvement
Ecommerce fraud detection software also provides you with strategic insights that can be used to improve your business. This is because you can see patterns in fraudulent activity and adjust your business practices accordingly.
Streamlined Analysis and Decision-Making Process
One of the most significant benefits of using eCommerce fraud detection software and tools is a streamlined analysis and decision-making process. On a manual level, it takes time to review each transaction, but it can also be difficult to see patterns or aggravating factors.
With software, all of this information is easily accessible in one place. The software can even flag high-risk transactions for immediate review, allowing businesses to decide quickly whether to proceed with a transaction.
Increased Overall Efficiency
The use of automated fraud screening frees up time and resources that were previously spent on manual reviews and investigations.
In addition, these tools provide more precise and accurate detection, allowing businesses to focus their attention on high-risk transactions rather than wasting time and energy on lower-risk ones.
With efficient fraud detection in place, businesses can also enjoy improved customer experience as fraudulent transactions are caught before they occur, preventing chargebacks and enhancing customer and merchants’ satisfaction.
Ability to Stay Ahead of Evolving Fraud Tactics
Advanced AI algorithms are constantly being updated to identify new patterns and trends in fraudulent activity, enabling vendors to prevent fraudulent transactions before they occur proactively.
In addition, the ever-changing eCommerce landscape requires constant optimization of fraud prevention strategies. A fraud detection solution streamlines this process by automatically updating real-time rules and risk scores.
By utilizing a comprehensive fraud solution, eCommerce merchants can confidently navigate industry changes while staying ahead of evolving fraud tactics.
Protection Against Potential Legal Liabilities
Potential legal liabilities are one of the businesses’ many risks when operating online. Without proper protection, businesses may be held responsible for fraudulent activities on their site.
Ecommerce fraud detection software and tools can help to mitigate this risk by identifying potential threats and flagging them for review. With these tools, businesses can ensure that their site is safe for customers and limit their exposure to potential legal liabilities.
Final Thought
Ecommerce fraud detection software provides businesses with several benefits, including increased security, reduced chargebacks, financial losses, business improvement, and increased efficiency.
These tools can help businesses avoid evolving fraud tactics and protect against potential legal liabilities. Companies can confidently navigate the ever-changing eCommerce landscape using a comprehensive fraud solution.
Want to learn more about eCommerce fraud detection software and tools? Contact us today at Dashwire.com.
