What's the best fraud prevention tool for your e-commerce site?

1 Address verification system (AVS)

An address verification system (AVS) is a tool that checks the billing address of a credit card against the address on file with the card issuer. This helps to verify that the person making the purchase is the legitimate cardholder. AVS is a simple and inexpensive way to reduce fraud, as it can filter out transactions with mismatched addresses. However, AVS is not foolproof, as fraudsters can sometimes obtain the correct address information, or use cards that do not support AVS. Moreover, AVS can also reject legitimate transactions from customers who have recently moved, or who use different addresses for billing and shipping.

2 Card verification value (CVV)

A card verification value (CVV) is a three- or four-digit code printed on the back or front of a credit card. It is used to confirm that the customer has physical possession of the card when making an online purchase. CVV is another easy and cheap way to prevent fraud, as it can prevent the use of stolen card numbers without the actual card. However, CVV is also not foolproof, as fraudsters can sometimes obtain the CVV code along with the card number, or use cards that do not require CVV. Furthermore, CVV can also cause friction for customers who have to enter the code every time they shop online, or who have worn-out or unreadable cards.

3 3-D Secure

3-D Secure is a protocol that adds an extra layer of authentication to online credit card transactions. It requires the customer to enter a password, a code, or a biometric data to confirm their identity with the card issuer. Examples of 3-D Secure are Verified by Visa, Mastercard SecureCode, and American Express SafeKey. 3-D Secure is a more advanced and secure way to prevent fraud, as it can reduce chargebacks and liability for merchants, and increase customer confidence and trust. However, 3-D Secure is also more complex and costly to implement, as it requires integration with the card networks and the payment gateways. Additionally, 3-D Secure can also increase cart abandonment and customer frustration, as it adds an extra step and delay to the checkout process.

4 Fraud scoring

Fraud scoring is a tool that uses artificial intelligence and machine learning to analyze various data points and indicators of a transaction, such as the device, the location, the behavior, the history, and the pattern of the customer. It then assigns a score to each transaction based on the likelihood of fraud, and allows the merchant to accept, reject, or review the transaction accordingly. Fraud scoring is a more sophisticated and flexible way to prevent fraud, as it can adapt to changing trends and scenarios, and customize the rules and thresholds for different segments and markets. However, fraud scoring is also more expensive and challenging to manage, as it requires access to large and reliable data sets, and constant monitoring and optimization of the models and parameters.

5 Fraud prevention platform

A fraud prevention platform is a tool that combines multiple features and functionalities to provide a comprehensive and holistic solution for e-commerce fraud prevention. It may include some or all of the above-mentioned tools, as well as other capabilities such as identity verification, device fingerprinting, geolocation, behavioral biometrics, email validation, and more. A fraud prevention platform is a more convenient and effective way to prevent fraud, as it can offer a higher level of accuracy, automation, and integration, and reduce the need for manual review and intervention. However, a fraud prevention platform is also the most expensive and complex option, as it requires a significant investment and commitment, and a high level of customization and support.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?