Payment Fraud And Online Electronics Stores: How AI Helps!
The e-commerce industry worldwide has always been susceptible to numerous threats and frauds, and among the different kinds of e-commerce businesses, electronics stores top the charts as the most vulnerable online marketplace. Fraudsters that target online electronics businesses are technologically advanced and use different methods and hacks to hide their location, IP address and device to commit fraud, making traditional methods futile in detecting even a hint of fraud in an order received.
Credit cards, the most preferred mode of payment for electronic goods have been the primary source of payment fraud in online electronic stores. The electronics industry is estimated to suffer 52% of all e-commerce fraud in a single year globally. Consequently, online businesses have started to adopt more focused and technology-powered approach in dealing with the losses and preparing themselves for fraud prevention.
According to reports, Artificial Intelligence is the most preferred tool of e-commerce businesses in fighting fraud as e-commerce fraud prevention tools that use machine learning have led to a decrease if 75% in payment and credit card frauds. A switch from traditional methods of fraud detection to technology-based e-commerce fraud prevention measures has led to 30% decrease in the number of instances where online electronics marketplace fell victim to fraud.
Chargeback fraud sometimes referred to as ‘friendly fraud’ that occurs when the credit card of a consumer is used to make online purchase and later disputed with the bank, is another kind of payment fraud that plagues the electronics e-commerce stores. The ‘chargeback’ claim is made when the goods have already been received by the customer.
Chargeback fraud also occurs when the order is actually placed by a friend or family member of the account holder when the former has access to the account information of the use. An AI-based e-commerce fraud prevention engine such as Mitra is able to overcome the shortcomings of traditional fraud prevention methods by reading and understanding the transaction patterns, user behaviour, previous purchases and much more. Mitra takes less than 200 milliseconds in differentiating between genuine transactions placed from fake or fraudulent orders.
The intensity of such frauds increases when a new electronic device like a mobile or laptop is launched on the online store, or at the times of special sales and festival discounts offered by the electronics store. Due to the sheer volume of transactions received by the business at such times, it can be next to impossible to manually detect any anomalies.
Fraudsters place multiple fraudulent orders from fake user profiles during peak sales season, undetected and unpreventable by static rules. Mitra is an all-inclusive Artificial Intelligence fraud prevention system that processes large amount of transactions on hundreds of parameters in just seconds. Mitra can flawlessly evaluate even large number of orders received with 100% accuracy, leaving no room for any kind of fraud in electronics or other kinds of e-commerce businesses.