Empowering Digital Commerce: Essential Fraud Prevention and Customer Service Strategies

The Visa Digital Goods Merchant Fraud Monitoring Program took effect on April 1, 2024. For merchants, this means one thing: now is the time to get serious about their fraud prevention strategy. 

As a payment services provider, Solidgate wants to help digital merchants protect themselves from rising fraud rates. We’ve composed a complete yet simple checklist of key antifraud strategies and tools you must implement and follow religiously to safeguard revenue, enhance transaction approval rates, and be in good standing overall.

Strategies for Enhanced Security and Efficiency

Using advanced tools and strategies, merchants can better protect against fraud and make it easier to solve payment disputes. These efforts help keep transactions safe and improve the shopping experience by offering clear billing information, quick customer service, and easy ways for customers to manage their accounts, leading to happier customers and safer sales.

Implementing Cutting-Edge Antifraud Measures

• Streamlining Dispute Resolution

By employing Order Insight and Visa Compelling Evidence 3.0 (CE 3.0), you can streamline representment processes and reduce fraud and chargeback risks. CE 3.0 requires merchants to demonstrate a consistent history of two prior legitimate transactions (at least 120 days before the dispute date) to prove the cardholder initiated an order. Additionally, at least two of the core data elements (User ID, IP Address, Shipping Address, Device ID/Fingerprint) must match between the previous transactions and the disputed one, with either the IP address or Device ID/Fingerprint being one of the matching elements.

• Identity Authentication

Utilizing device fingerprinting helps authenticate customer identities and mitigate chargeback and friendly fraud attempts. This method collects data on a user’s device, such as browser type and hardware specifications, during their interaction with a website, app, or server, allowing for analysis of potentially fraudulent or harmful intentions.

• Dispute Mitigation

Chargeback prevention alerts have become crucial in today’s e-commerce environment. Leveraging these alerts enables merchants to resolve disputes and enhance customer experience quickly through prompt feedback.

• Suspicious Activity Detection

Employ fraud screening tools like machine learning algorithms and detailed analytics to identify suspicious activity, refine your risk strategy, and balance reducing fraud and boosting conversions.

• Threat Identification

Use behavioral analytics to identify suspicious user behavior and compile “black” lists of fraudulent transaction elements (e.g., names, email and IP addresses, device IDs, customer identification numbers, and telephone numbers) to block customers who pose a threat.

• Customizable Risk Rules

Understanding user behavior is critical for developing effective anti-fraud measures. Implement customizable risk rules and set transaction review thresholds based on the number and value of approved transactions, ensuring precise and proactive risk management.

• Transaction Security

The accuracy of 3DS2 enhances fraud prevention and increases legitimate transaction acceptance rates while also shifting the liability for fraud-related chargebacks to the card issuer.

• Compliance Assurance

Examine PCI DSS security standards to ensure website compliance and security, particularly regarding authentication, web session management, and security protocols.

• Performance Monitoring

Monitor decline rates and reasons to detect trends, enabling action when necessary.

Exceeding User Expectations

• Flexible Refund Policies

Maintain a flexible refund or return policy, offering full or prorated refunds for cancellations made shortly after billing.

• Prompt Customer Support

Ensure swift and timely responses from your customer support team. A stringent SLA, ideally up to 5 minutes, is crucial as delays can significantly impact customer satisfaction. Also, ensure your FAQ page is comprehensive and easily accessible, along with a clearly displayed support email/telephone number.

• Password Recovery Solutions

Create methods for customers to easily recover forgotten passwords, prioritizing two-factor authentication for added security.

• Customer-Centric Product Development

Thoroughly analyze customer reviews and feedback to tailor product development and address dissatisfaction, improving the overall customer experience.

• Session Continuity

Utilize browser cookies, with explicit consent or for GDPR compliance, to keep user sessions active.

• Brand Recognition

Choose a brand billing descriptor that is easily recognizable to your users.

• Targeted Marketing Strategy

Identify your target market and select secure, engaged traffic sources and partners for promotion.

Subscription Billing Model Recommendations

• Transparent Billing Terms

Clearly disclose billing terms at checkout, requiring user consent upfront (preferably with an unchecked checkbox). The disclosure should include a service description, cost and frequency of charges, and cancellation/opt-out instructions.

Example of a compliant disclaimer:

“You are enrolling in a monthly/annual/weekly subscription to [name of the website] service. You agree to be billed [full price of the subscription] per month/week/year until you cancel the subscription. Payments will be charged from the card specified above/below/here. To cancel, please visit our Cancellation Policy+link / write to [support email] / OR You can cancel your subscription in your account/profile settings.”

• User-Friendly Cancellation

Implement an easy online cancellation method, such as a “Cancel Subscription” button in the user’s profile or a similar link on your website.

• Communication Clarity

Scheme rules allow you to send transaction receipts and email notifications to your users (a detailed guide on these requirements can be found here).

Conclusion

Following these recommendations enables you to manage fraud effectively while ensuring a smooth customer journey. A comprehensive and integrated approach is vital for addressing fraud efficiently. Proactive measures, appropriate tools, and adjustments in communication and expectations can greatly reduce risk. Remaining vigilant encourages customers to seek resolutions other than chargebacks, protecting your business from potential repercussions. Solidgate is here to assist in developing a risk strategy that minimizes fraud’s impact.

We wish you the best in your efforts.