Posted by Andre Edelbrock on Tue, Jun 08, 2010
The U.S. Federal Trade Commission estimates that six times as much revenue is lost to "fear of fraud" as to actual fraud
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How making online shopping safer means a more profitable online environment for all
Beyond the total cost of fraud you may face today, there is an even bigger challenge: many potential customers are afraid to buy online. They don’t think it’s safe.
In fact, six times as much revenue is lost each year to fear of fraud than to actual fraud, according to the U.S. Federal Trade Commission.
That number is consistent with surveys and research by other organizations as well. VeriSign says half of Internet users avoid buying online, for fear of their financial information being stolen. And of those who have been victims of fraud:
- 12% don’t shop online any longer
- 25% shop less frequently
- 19% spend less when they do shop online
And according to figures from a CyberSource 2009 survey:
- 71% of consumers are concerned with the level of risk when shopping over the web, an increase of 5% over 2008
- 24% of consumers (the largest grouping of answers) say it is merchants’ responsibility to make online shopping safe
Making online shopping safer -- It's within your control
Trust seals can and do increase the perception of safe shopping for many. They, however, can only go so far, and with constant media attention paid to massive data security breaches such as those perpetrated against Heartland Payment Systems, TJ Maxx, Hannaford Supermarkets and many others, not to mention the myriad tales of unscrubbed and unprotected data on used hard drives, archival tapes full of social security numbers and other personally identifiable information falling off the back of trucks, consumers are rightly fearful that no matter what they or merchants do to protect their data, there are weak links in the security chain that put them at risk.
In fact, there are 3 elements to making Internet shopping not only as safe as it can be, but truly the safest form of shopping. First, merchants need to implement proper security precautions, especially PCI compliance. Second, compliance needs to be regulated and certified (and advertised by the accompanying trust marks). Finally, merchants need to ensure that in the event security is breached, that minimal harm comes to the consumer. The best way to do that is through collaboration with other merchants, as well as card issuers, fraud vendors, payment service providers - in fact, all the stakeholders in ecommerce.
The Global Fraud Alliance is that third and critical piece in making internet shopping safer. It provides a shield against misuse of breached and compromised data, by enabling merchants to gain insight into each other's payment experiences in real time, without compromising the privacy or security of their data.
Ethoca has recently made a very important contribution to safe shopping by making Ethoca360 Negative Signals freely available to any merchant that signs up for service during the introductory period. And, not just free to sign up, but free forever. Merchants need only apply and start actively using the service during the introductory period to ensure this lifetime benefit. This service is also being made available through partners such as 41st Parameter's FraudNet technology, GB Group's URU identity service, and the IMRG ISIS (Internet Shopping Is Safe) program. This network is rapidly growing to include other payment service providers and fraud merchants, and in the very near future will include many other in the U.S., Canada, U.K., and throughout Europe.
A safer online environment means a more profitable online environment
The more merchants collaborating against fraud, the safer the Internet will be, and the more customers will shop online.
Doing your part is simple, and most importantly, it will start saving you money right away, no matter what fraud tools or services you already use. That's because Ethoca360 Negative Signals is designed to be an additive service, compatible with all 3rd party offerings. This is simply smart business for members of the Global Fraud Alliance. Increasing the consumers willingness to shop online means more business for everyone.
We invite you to join.
Posted by Paul Paetz on Mon, Aug 31, 2009
The Global Fraud Alliance is more than members pooling data to create the world's most formidable force against fraud. It is also a community of like-minded merchants, sharing insights, news, stories and experiences.
Over the past year, Ethoca has rolled out a number of social media tools to help members stay abreast of what's going on, communicate with the community, engage in conversation over some of the key issues affecting us all, and receive alerts on breaking news. This blog is one of those tools, but we want to ensure you know about all of them and are able to choose the update methods that work best for you. Read on to learn more about the other community tools available.
Twitter
If you're already on Twitter, then no explanation necessary. Just click this button and start following Ethoca. If you're reading this blog on the web (vs in an email or newsreader), then you'll see that we also have the most recent tweets in the blog sidebar, and a button immediately below them that you can click to follow.
You may find this the easiest way to stay in touch with the community if you are interested in being kept abreast of all updates, since Ethoca broadcasts all blog posts, press releases, videos or other Ethoca or community news as it happens from Twitter. We will also use Twitter to broadcast any topical news, including external articles of interest, quick opinions, and anything that has urgent relevancy to the whole community. You can also use hashtags (e.g. #fraudalliance) to post your own messages of interest to the whole community, or create your own tags for subjects of interest to you.
If you haven't started Tweeting yet, or following anyone, it's easy to do. Just go to Twitter, and sign up for an account. You can either come back here and push the button to start following us, or search for the username andreedelbrock, and click the follow button inside Twitter.
This blog is hosted on the
finextra.com, an independent news site and for the financial technology community. Finextra covers all significant technology news in wholesale and retail banking, the capital markets and insurance. Andre's blog is focused on issues of concern to that community, such as payments, credit card, financial fraud, and risk and responses to articles and other commentary on this site.
Want to hear the stories of other members and the unique problems they had to solve? Want to tell your own story to the community? This is the place to see and be seen. There are already some very compelling video clips posted, and we hope you'll want to share yours too.
If you want to get your community video on the Global Fraud Alliance channel, send a note to Ethoca at community@ethoca.com and we'll get in touch to help you record and post it.
Posted by Paul Paetz on Wed, Apr 15, 2009
Top-drawer pre-paid card provider M-Cube Media sees the Ethoca-powered Global Fraud-Fighting Community as a breakthrough means to combat fraud, and wants to be out front in the fight. Mashallah H. M. Ali, M-Cube’s CEO, says the collaborative efforts of fraudsters have to be met with equally collaborative efforts on the part of online merchants.
“Fraudsters are working together to attack online merchants and the integrity of our payment systems, and everyone affected needs to collaborate in the effort to fight back,” says Ali.
The noted business innovator says M-Cube will use Ethoca’s revolutionary collaborative fraud management technology to be out in front of the fraudsters who target customer-not-present transactions. M-Cube Media has been a leader in new solutions for the pre-paid card industry, so it is natural the company has become a leader in confronting fraud, as well.
M-Cube customers range from the UK’s Aspinall Foundation which innovatively protects western lowland gorillas in Africa through cardholder loyalty rewards, to Ireland’s Ryanair, a leading international air carrier.
Posted by Paul Paetz on Sun, Feb 15, 2009
CEO of TigerDirect Advocates for Social Approach to Solve Vexing Customer-Not-Present Fraud ProblemGilbert Fiorentino is a co-founder of TigerDirect, a top 10 consumer electronics and computer equipment etailer (#6 on the Hitwise list), but despite the size they’ve grown to, credit card fraud still irks Gilbert in a very personal way, as though the cybercriminals TigerDirect confronts every day were stealing the cash right from his wallet. You get the feeling listening to him that he’d gladly confront them in a dark alley.
He says the reason retailers are losing the battle against cyberfraud is that the criminals are working together, selling stolen card numbers and sharing their code scripts and “best practices” for committing fraud, while the merchants work alone. Gilbert contends that if every single merchant joined together to share what they know, online fraud could be completely eliminated, and even enthusiastically encourages (even wishes for) his competitors to join the Global Fraud Fighting Community.
He tells his story in the attached video.
Posted by Paul Paetz on Thu, Dec 11, 2008
It’s so great to see our newest member Tahoe Mountain Sports getting the
word out about the Community.
Nice to see it get picked up by the Outdoor Industry Association.
Thanks David!
Also, David shared some great insights in a video on the Community channel on YouTube. Watch embedded clip below, or use the link above to see it.
Posted by Paul Paetz on Thu, Oct 30, 2008
On behalf of the Ethoca team I’m very excited to be introducing this new blog to the Global Fraud Alliance.
Our goal for this blog is both to provide relevant information and insights about the e-commerce fraud landscape, and to open lines of communication across all the stakeholders in e-commerce. By all stakeholders I mean not just merchants but also payment companies, fraud solution providers, law enforcement, delivery service providers and industry associations. Our belief is that the problems, issues and opportunities we face as an industry, especially when it comes to squeezing the Total Cost of Fraud are best met by working together. Whether or not you are an official Member or Partner of the Community, we all want to hear from you!
We'll go beyond the issues concerning fraud in the strictest sense, and cover the whole terrain from payments issues, regulatory compliance, credit cards, security, privacy, data breaches, technology advances, best practices, research data, organized cybercrime and more. We want to be a valuable resource that you'll keep coming back to, and also participate in.
Keep yourself up to date by subscribing to our RSS feed and if you like what you are reading please help others learn about the community by using the social media sharing tools at the top of every post.
Andre Edelbrock
CEO, Ethoca