Experiences in Managing

e-Commerce Fraud?

• 2013-05-22

Where our input is from?

52,000businesses worldwide trust Ogone to manage, secure and collect their online and mobile payments

137 Motransactions processed in 2012 (worth € 16.6 Bn)

200+acquiring partners and banks

200+resellers, industry partners and shopping carts softwares

1000+new merchants per month

20+white-labels

85+international, local and alternative payment methods

Worldwide

Trends & Experiences

Supporting Merchant

360 degrees

Trends & Experiences

A few observations

Is fraud a priority elsewhere?

• Fraud rate NL : 0.4%

• Fraud rate FR : 1.4%

• Fraud rate UK : 0.8%

• Fraud rate DE : 0.6%

• Fraud rate BE : 0.6%

Analysis done through 200+ merchants from all size, manyindustries and various gateway services.

Optimized conversionThink global, Act local

iDEAL in NL

ELV strong in DE

BC/Mistercash in BE

Credit Cards

in BE, FR, UK

PayPal in UK & DE

3-D S discrepancies

AVS in UK

Chargeback risk?

3-D Secure adoption*

Analysis done through 12 M+ transactions during the month of October 2013 (includes all payment methods)

60% 62%

18%

32%

69%

21% 21%

37%

BE NL FR DE CH SP IT Total

Supporting merchants360 degrees

What is Merchant “Cost of Fraud” ?

Sound understanding of

direct & indirect costs

Evolution Monitoring

Direct financial

costs

Missedrevenues

Preventioncosts

Data is key

Personal data

Billing/Shipping data

Card data

Shopping basket data

Travel related data

Card country

Departure-Destination

Average amount

IP country

Time to departure

+combination of

all the above

Get a better understanding of fraud

patterns and caracteristics

Affiliate fraud

Social engineering

Friendly fraud

+

Real time Behavior mapping

Rules & Profiling

Device Fingerprinting

Smart authentication (3-D Secure, AVS)

Etc.

Blacklists, greylists, whitelists

Use cross-merchant databases

• Mobile top up provider• Propose recharge of 25 European mobile phone networks• 50 000+ transactions per month• Triple digit yearly growth since 2010

Key Challenges

• Larger volumes & better visibility led to more fraud threats

• International development. First stop: France

More fraud attempts, less conversion

Narrowed margins

Situation before

30% of orders were blocked

Fraud rate above 1%

Solutions

• Implementation of a second layer of protection

• Loosen their fraud rules and velocity checks

• Use of the latest technologies such as Device Fingerprinting

• Better profiling of Positive and Negative customers

• Outsource the reviewing of suspicious transactions

After 2 months

Air India Your Palace in the Sky

Flag carrier of IndiaFounded 15 October 1932

•109 Aircraft• 60 Domestic destinations• 31 International destinations• 19 Countries

Key Challenges

• Two brands Merger – Air India and Indian Airlines

• Bottleneck in Scalability of Manual Review

• Team Awareness

• Cleaner fraud with IP, Card country and others Matching

• Travel agent VS Fraudster

Situation beforeBusiness discontinuity threatens…

90% of orders were manually

reviewed

Time taken for review was 8 hours

After 6 months

2 hours

Information available on

1 single screen

8 hours

Need to review data from

different sources

Lead time for manual review reduced

Reduced time between booking & flight…

Till Last Minute

For international & domestic

flights

From 72 hours

Charge back rates fell from 0.34% to 0.01 %

REVIEW REVIEW

3-5%90%

Conclusion

• Fraud losses were drastically reduced

• Increase in ecommerce sales

• Order acceptance up to 35%

• Reduced Cost and time taken for manual review

• Profiled Positive and Negative Customers

• New routes were adopted easily

www.ogone.com

Thank you

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Mobile paymentPayment

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