A proactive approach towards fraud is an excellent strategy, but sometimes merchants decline perfectly legit transactions unknowingly. So how can you protect your business proactively without turning down payments from your hard-earned customers? Stats show a whole, 58 percent of all turned down payments are legitimate transactions.
Because businesses hardly look into data like transaction approval rates, it’s easy to find yourself rejecting high volumes of legitimate customer payments. Such companies lose money because they use obsolete anti-fraud tech and have an extremely high false positives rate.
Merchants must now implement smart fraud safety tools that can investigate and determine a customer’s real intent and decide accurately on each payment attempt. Ideally, this starts with your data collection strategy, which should encompass data like IP & email addresses, and payment avenues put together to check for transaction validity.
Unfortunately, many businesses now realize that these data sets can’t determine a payment’s legitimacy. Retailers must go the extra mile to tell between legitimate and fraudulent transactions through technologies like artificial intelligence.
Fraugster, a fraud protection company, has pioneered an AI tech that analyses each payment’s behavior and validates everything in real-time, increasing the likelihood of an accurate decision.
That way, businesses can protect their bottom line without blocking perfectly legit and profitable payments. It also significantly impacts customer experience because buyers hate long tiresome product searches that end with rejected transactions.
How AI separates Legit from Fraudulent Payments
Tech is your best friend when analyzing payments, and nothing does it better than AI. Artificial intelligence looks into multiple data points to investigate each transaction.
When a customer tries to pay, all the information goes to the AI-tool for validation. During this process, the technology analyzes the data putting it side-by-side with existing records to check for legitimacy or suspicious activity. It studies info like;
- Number of previous purchases on a credit card
- How often the purchases happen
- Matching login information
- Whether or not a single shipping address is registered to two credit cards
All these data sets are useful in telling the real story behind a transaction. They also simplify the process of identifying irregular patterns or possible misjudgments.
After this, the AI-tool gives a Fraud Score and reaches a final reasonable decision. Thanks to artificial intelligence, all these happen in a matter of milliseconds.
The bottom line
Businesses spend plenty of money and time searching for customers. It can be discouraging to realize that you’ve been blocking several legit transactions because your fraud protection technology can’t make the right decisions. It also runs customer experience and causes friction at checkout. Merchants must not adopt the latest technologies like Fraugster’s AI-tech.