As card fraud progressively moves to e-commerce, more vendors offer merchants the tools to monitor their progress in thwarting cybercrooks — and the information collected in protecting their data also helps merchants promote sales.
London-based ReD, formerly Retail Decisions, is launching a new Web-based service called ReDi that serves this dual purpose, says Phil Stothard, ReD's director of business intelligence and data.
"We cover a lot of information and we are always adding to it, so the merchants can learn an awful lot about fraud, but also about how their business is doing," Stothard says.
"The new portal can give them comfort to know things are OK, or at least know what 'good' looks like," he says.
In the same vein of providing more fraud information and allowing merchants to also view the good things happening at their business, Boise, Idaho-based Kount is launching its Kount Complete fraud prevention service for online merchants throughout Europe, after five years of building up a customer base in the U.S.
Kount Complete analyzes hundreds of variables and fraud activity across the globe in real time to provide risk assessments on transactions in 350 milliseconds, says Don Bush, Kount's vice president of marketing.
Because the system screens online transactions and funnels data into an artificial intelligence system, the security measures change as fraud methods change, Bush says. "There are new features in the system every 90 days," he adds.
The system's business intelligence tools also provide merchants with data about sales that can help them monitor positive things occurring at the business and spark ideas to increase orders, Bush says.
"Fraud has always been looked at as a cost center," Bush says. "Kount Complete provides a different way to look at it."
An online merchant who discovered through Kount that many of his legitimate orders were coming from Germany began posting some German ads on his site, Bush says. "In doing that, he was able to increase sales," he adds.
Because up to 95% of the orders on a merchant's site are valid, only a small percentage of transactions get declined, Bush says. Even though Kount Complete is meant to be affordable to small merchants, it helps to show merchants that the data can help them build on the positive aspects of their business, Bush says.
ReD and Kount join companies like Visa Inc.'s CyberSource unit, which has long been touting the message that its technology helps merchants manage risk and reward, says Julie Conroy, senior analyst and fraud expert with Boston-based Aite Group.
"In reality, I think fraud will always be viewed [by merchants] as a cost center, but as e-commerce fraud attempts continue to rise, the metrics provided by these dashboards also give the fraud teams the data they need to prove value and ROI," Conroy says.
Overall, fraud vendors are trying to give merchants the power to control their own destiny when it comes to fraud management, Conroy says. This occurs through rules-setting engines and case management systems that provide merchants "a central place in which they can work the case," she adds.
Online merchants seek the ability to make informed decisions, Conroy says. "If the rules are too tightly set, then good customers will be turned away, something being referred to as customer insults," she adds.
ReD plans to expand its new portal service to become a shared data device for merchants and their issuing banks so that both sides of a transaction equation become aware of the same fraud attempts, Stothard says.
Both ReD and Kount plan to push their services through direct sales forces and acquiring or independent sales organization partners.
The ReDi portal service can be a value-added service for current clients, or it can be purchased in an advanced form for larger clients. Kount is sold to clients based on the number of transactions reviewed, through a prepaid block of transactions or a flat monthly fee based on average use.