Why do small businesses need fraud management?
August 31, 2020
The increased pace of digital transformation presents businesses with opportunities to reach a larger audience without geographical limitation. But the more we adopt these connected ways of working, the more opportunities we present to fraudsters—who can also learn and grow in line with new technological advancements and changing consumer behaviors.
Fraud can be particularly threatening to small businesses, as financial instability could put your business at risk. Despite this, 48 percent1 of small businesses still believe that they’re simply not big enough to be of interest to fraudsters.
Some small business owners may think that if their business hasn’t yet been a victim of fraud, then it isn’t something they need to worry about. But by failing to take the right precautions, you might find that you’re actually making your business a much more attractive target for sophisticated cybercriminals.
Over the next five years, analysts predict that small and medium businesses will be hit with more than $130 billion in losses due to payment fraud.2
The impact of fraud extends far beyond just losing money. The repercussions of a data breach could impede your workflows, stall businesses development, impact customer trust, and even risk legal liability. Fraudsters don’t discriminate when it comes to their victims. A single fraudulent attack on your business could massively outweigh the cost of a fraud prevention solution, so it’s clear you should to take steps to prevent fraud.
But when implementing new fraud prevention solutions, you should ensure that it’s the right solution for you. You may assume that fraud management is costly and complicated and avoid adopting a robust fraud prevention strategy as a result. Research shows that the two most common methods of fraud prevention used by small businesses simply aren’t enough. Here’s why:
- Manual review: Approximately 98.5 percent3 of reviewed orders are accepted, but large amounts of manual reviews can be time-consuming, interrupting the overall user experience by needlessly drawing out the ordering process.
- 3D Secure: By verifying the identity of the cardholder at the time of transaction, the responsibility of the transaction shifts from the business to the bank. However, 3D Secure provides only one layer of security and should be implemented as part of a multi-layer approach, rather than your sole method of protection.
Powered by VisaNet, Fraud Management Essentials (now available in North America, Europe, and Asia Pacific) leverages the same power and intelligence as Cybersource’s Decision Manager solution, a fraud prevention tool informed by insights drawn more than 68 billion global transactions processed each year by Cybersource and Visa. This means you can rely on machine learning and AI to do all the heavy lifting, while also enjoying the simplicity of automatic monitoring and maintaining control through a user-friendly dashboard.
Our solution is designed for small businesses. By adopting the lightweight, yet powerful Fraud Management Essentials, you can offer your customers a secure and seamless purchase experience, all while helping your business better identify fraudulent transactions:
- Easy setup with pre-set fraud rules: Pre-configured settings help you get setup quickly, while still letting you maintain control of your risk tolerance.
- Accurate fraud detection for quicker acceptance: Harness the power of advanced machine learning to validate transactions in milliseconds, allowing genuine transactions to take place without interruption and improving your order acceptance rate.
- Reduce costs incurred by common fraud attacks: Save time and resources by avoiding unnecessary chargebacks and declined authorization.
- Make better informed decisions: Designed with ease and efficiency in mind, our simplified dashboard gives you all the information you need to accept or reject flagged transactions.
If you’d like to know more about what Cybersource can do for you, check out our introductory video.
1. “Research Report: Why fraud prevention is a strategic investment for businesses of all sizes,” Emailage, 2019.
2. “Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2018-2023,” Jupiter Research, 2018.
3. “Online Fraud Benchmark Report – 2018 Southeast Asia Edition,” Cybersource, 2019.