Merchants have a new tool at their disposal to help mitigate the risk of fraud in online transactions, with MasterCard’s introduction of Expert Monitoring Fraud Scoring for Merchants.
The new tool enhances insight into card behavior beyond a merchant’s website or a cardholder’s shopping cart. The service provides merchants with a predictive fraud score for Card-Not-Present transactions in real time to measure the likelihood that a transaction is fraudulent.
This is done using fraud detection models designed specifically for eCommerce merchants, which uniquely enables merchants to evaluate a longer span of transaction history to deliver a fraud score that more accurately describes online cardholder behavior.
eCommerce merchants continue to face heavy losses from fraudulent transactions. According to the Lexis-Nexis 2011 True Cost of Fraud Study, merchants incurred costs of more than $2.33 for every $1 of fraud committed, absorbing more than $102 billion in total losses in 2011.
To lower their risk in this space, eCommerce merchants utilize an average of four to seven fraud detection solutions to validate orders and identify fraudulent transactions.
MasterCard’s new tool also benefits consumers, as it helps protect them from fraudulent transactions on their cards, while minimizing the potential that legitimate transactions are declined.
“Fraudsters are becoming increasingly sophisticated in their approach, so online merchants must be even more vigilant in their efforts to protect the integrity of the online shopping experience for cardholders,” says Johan Gerber, Group Head, Global Network Products for MasterCard Worldwide. “Our new tool allows acquirers and their participating merchants to look at the potential for fraud in a transaction in real time, and integrate the data into any existing fraud detection solution. This helps increase accuracy in fraud detection, and helps to reduce the bottom-line impact of fraud.”
Simulations that MasterCard conducted with the tool showed that eCommerce merchants could realize a potential for 15-30 percent fraud loss savings, simply by reviewing or automatically declining transactions deemed as high-risk by the using the new tool.
Beginning in May, the Expert Monitoring Merchant Fraud Scoring tool will be available as an option for acquirers and their merchants across the globe on all Card-Not-Present transactions originating from U.S.-issued cards.