We define payment fraud as any action taken by certain people or a group of people or by computer programs, during digital business transactions of a company or a group of companies, which cause significant tangible and intangible losses to both the victim and the company.
Three of the most common methods of payment fraud include:
- Accounts getting hacked
- Payment details being compromised
- Taking undue advantage of a company’s refund policies
In 2018, companies incurred losses worth over $24 billion due to payment fraud and is estimated to have increased by 18.4% percent every year till date.
In this article, we talk about how a good proactive payment fraud management program can help you mitigate fraud.
This article will be useful to you if you are an owner or manager of a company that regularly deals with digital transactions (such as e-commerce) or plans to use digital methods of payments in the future.
The methodology we have created lists out how you can prevent fraud in your transactions, and all it requires is the following-
- Back-end data of your website or application
- A good spreadsheet program
- A dedicated team of employees
Bringing your back-end data to the forefront
For any website or mobile application, there is a plethora of data being generated every second based on the activity of your users. If your business is based on a website-driven model or mobile application-driven model, then you also have a resource called the webmaster; some of you might have an entire team of individuals who take care of your website/application.
This individual/team is exposed to vast amounts of key back-end data on a regular basis, and you could use this data to detect any patterns of fraudulent behavior. There are various types of data generated by the servers of your website/application; however the following are significant for prevention of payment fraud: