Adopting new payment channels and managing the risks

The e-commerce industry is dynamic by nature and while this may lead the way to new opportunities, it can also open up potential security risks. In order to for you to minimise and better manage the risk involved when exploring new payment opportunities our Managing Director, Michael Norton, has put together some top tips.

1. Ensure there is a robust, traditional e-commerce fraud prevention system in place, so that best practice strategies can be rolled out to the new shopping platforms.


2. Make sure you understand the difference between ‘conventional’ card not present fraud and the type of fraud which is possible via mobile and social media. Since these payment channels are relatively new, there is less history available to monitor potential fraud risks associated with transactions. In addition, consumers using these channels provide less personal data than through traditional e-commerce sites, so the retailer has less criteria to check against. Consequently this means that each transaction has a smaller footprint and e-retailers will need to be more vigilant in securing customer information.


3. The nature of these new channels means that inevitably there will be less information to hand for each transaction. Therefore in order to identify any suspicious activity, it will be necessary to maintain a transparent view of all money coming in and out of the business in real-time. This means that all fraud monitoring will need to be carried out using a detailed set of criteria which incorporates as many fraud prevention tools as possible.


4. Before investing in developing new retail offerings, remember that not all products are suited to being sold via these new channels. Therefore you should consider whether the demand from consumers is there or will likely exist in the future.


5. Accept that investment in fraud protection could prove costly, while these new shopping channels are in the early stages of adoption. Therefore in order to take the hassle out of monitoring e-commerce fraud, you may wish to consider outsourcing your online payment platform to an expert as this will enable you to focus on your core business offering.

Ensuring our merchants are able to offer a safe shopping experience at all times is paramount, which is why we first introduced ‘FraudGuard’. Our FraudGuard fraud management platform reduces online fraud by up to 70%. It checks each transaction against 35 fraud criteria in real-time, allowing our merchants to fine-tune fraud policies and protect their customers against fraudulent activity, such as ID theft and payment card fraud.

Read the full report commissioned by Cebr.

About the research

The Centre for Economics and Business Research analysed the future of internet retail sales and its impact on e-commerce fraud in the UK in May and June 2011. The report uses data from the Office for National Statistics, Financial Fraud Action UK and an Opinion Matters survey of 2,000 consumers, especially commissioned by PayPoint.net.