The Australian National Retailers Association (ANRA) has predicted we’re going to spend $1.7 billion in Christmas shopping this year.
Latest figures from Roy Morgan show in the 12 months to September 2014, about 7.3 million Aussies bought one or more products over the internet in an average four week period. Almost 64 per cent or (4,730,000 people) purchased locally, while 39% (2,896,000) bought from overseas websites.
While the festive season can provide a huge injection of revenue for most retailers, it also inevitably attracts fraudsters looking to take advantage of last minute shopping trends, spontaneous shopping and smaller delivery windows, in the hopes that their activities will slip through undetected.
A report by the Australian Payments Clearing Association (APCA) revealed that payments fraud in Australia is increasing as part of a global trend – largely due to a rise in card-not present (CNP) fraud. In 2013, CNP fraud on Australian credit cards increased from $183.1 million to $219.7 million off the back of strong growth in online spending by Australians.
So, as an online retailer, how can you make sure you’re efficiently processing the season’s major increase in online transaction sales, while still making sure you’re providing a positive experience for new and established customers?
Start by identifying your weak points: Understand where your weak points were in previous years and work on ensuring it doesn’t happen again. For example, if delivery fraud was a problem, you could identify postcodes which need higher review rates and channel your resources away from areas which pose less risk. Delivery fraud can also be minimised by avoiding shipping your goods to a temporary address such as a hotel or even to a PO Box Number.
Review and prepare your systems: Take a look at what changes have been made to product lines, sales channels, available payment methods and delivery options. Then review whether these new initiatives are protected with specific and tailored fraud rules and strategies. Implementing automated risk strategies can reduce manual review rates which can help control the demand on internal resources.
Make sure you’re up to speed with fraud trends: Use your existing data and industry information to understand which cards, IP and email addresses pose the biggest threats and make sure you are monitoring them. If you are planning a marketing campaign that could potentially provide opportunities for fraudsters, ensure you have all the information you need and the tools in place to protect yourself.
Watch for suspicious orders: Is the order unusually large for your business? Is the customer trying various cards in order to make a successful payment? These are surefire warning signs of someone trying to make an unauthorised payment. Remember that as a merchant, you can be held liable for fraudulent transactions.
Use a fully hosted payment gateway provider: Customers expect their data to be secure when they shop online, so as a merchant make sure you use external services like PayPal that collect payments on your behalf securely. Also take advantage of authentication tools available online like American Express Safekey, MasterCard SecureCode and Verified by Visa.
Sheryle Moon is the Chief Revenue Officer at eWAY, Australia’s leading online payments gateway powering more than 17,000 customers online.