How widespread is online fraud?

Internet fraud is an enormous problem for online merchants. Fraud rates of up to 50% higher online than with in-person transactions (www.epaynews.com) are being tracked. But merchants are often concerned that reporting fraud incidents will make their site appear non-secure to customers or more accessible to hackers.

What types of online merchants are victims to fraud?

While the percentage of fraudulent transactions that a web-store experiences depends on its product categories, brands, site hits, and delivery methods, most online merchants report at least some level of credit card fraud. Sites selling non-tangible or soft goods such as software, music, videos, graphics, games and information are at a higher risk because they are exposed to a greater level of anonymity. Sites that sell soft and non-tangible goods have reported on average an estimated 30 percent of total sales being fraudulent.

What is a chargeback?

A chargeback occurs when a credit card holder "charges back" a given charge on his monthly statement. If the cardholder can show that the charge is bogus, the card issuing bank is legally obligated to credit him the full amount. If the charge is related to an Internet transaction, the internet merchant is responsible for supplying the issuer with 100% of this total cost. Issuing banks charge online merchants heavy fines for such chargebacks. If an online site is the victim of too many chargebacks, banks will close merchant accounts immediately.

How are Internet merchants affected by online fraud?

Your profitability as online merchant is victim to online fraud in a number of ways, such as loss of products, shipping and handling fees, bank fees and lost work hours spent handling chargebacks and false claims. Merchants with high levels of fraud may be charged a higher discount rate by issuing banks, and could face loss of accounts if fraudulent sales exceed the percentage rate of their total monthly revenue.

Does an e-merchant need additional fraud detection and prevention if all orders are already reviewed?

Yes! Using human fraud investigation is both inefficient and tedious. It is also very difficult to guarantee accurate results. To effectively scale and maximize profits, e-merchants need to automate their order acceptance as much as possible. The SafeCharge system uses sophisticated algorithms to detect suspicious orders, and weapons online merchants with the tools to easily review its results for each transaction.

What does the SafeCharge fraud prevention offer that is unique?

The SafeCharge fraud prevention is a highly scalable solution. It is unique in that it provides a total solution, combining both rules-based expert system modeling and neural network decision systems. Furthermore, the SafeCharge system can be fully customized based on the demands of specific e-merchant services and products.

Additionally, SafeCharge provides instant alerts to let the merchant know about retrievals - when a sale has merely been questioned. This gives the merchant enough time to settle the issue with the end-user before he makes an official chargeback.

How can the SafeCharge fraud tool be customized for an e-merchant's online business?

The SafeCharge Rules Engine makes decisions based on a specific set of business and risk management rules unique to the client. All SafeCharge products come with a basic set of rules, while e-merchants are given an easy-to-use toolset that enables them to add, remove, or modify rules according to their business needs. Additionally, the online merchant can upgrade the basic product with specific scoring services tailored to its business.