As e-commerce continues to evolve, so do the tactics of exploitation. With online fraud on the rise, merchants are actively seeking robust fraud detection and prevention solutions to safeguard their operations, customer experience, and revenue. This blog explores the top e-commerce fraud detection solutions available today.
Why Online Fraud Detection is a Critical Business Requirement
The rapid growth of e-commerce and advance technology has accelerated the sophistication of online fraud. From chargeback fraud to account takeovers, businesses face ever-increasing threats, and ignoring these risks can result in severe financial losses, brand damage, and loss of customer trust.
Today, merchants must adopt fraud detection tools that are not only accurate, but proactive – identify and prevent fraudulent behavior before it causes damage. Whether it’s spotting unusual purchase patterns, identifying fraudulent user behavior, or safeguarding transactions, advanced fraud detection tools are essential for staying ahead of cybercriminals. Below are some solutions for identifying and mitigating fraudulent activity in e-commerce transactions.
- Zumigo: Payment and Identity Verification and Authentication
Zumigo helps merchants prevent fraud in real-time by assessing the risks of transactions based on shopper digital identities, including mobile device and related account; payment; email; and related log-in details. Zumigo DeRiskify ensures the person making the transaction is indeed the authorized owner of the account by verifying the following: name and address associated with the phone number and payment instrument; IP address of the customer’s browser client; email address validity; and geodesic distances between billing address, shipping address and customer IP address.
Additionally, Zumigo DeRiskify allows merchants to offer a passwordless sign-up/sign-in option to simplify the shopper experience and improve identity security. The dashboard offers a summary of the transactions so that merchants can see how their purchase orders are performing at a glance. Zumigo DeRiskify integrates with mobile network operators and other partners for authoritative information to provide transaction assessment that is instant and highly accurate. The solution is the only e-commerce platform on the market that prevents fraud at both the start of the shopper journey – the sign-up/sign-in process – and at the end – the checkout process.
Key Features:
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- Unique real-time mobile and digital identity verification using carrier network data and other authoritative data including payment and email, for high accuracy
- Assess transaction risks so that merchants can choose not to fulfill risky orders
- Improve and simplify shopper sign-up/sign-in process with passwordless sign-up/sign-in process
- Authenticate shopper identities and transactions with MFA
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- SEON: Digital Footprint Analysis and AI-powered Detection
SEON is a fraud detection tool that analyzes real-time digital footprint analysis, device intelligence and a customizable AI-driven rules engine. SEON equips e-commerce businesses to proactively identify and mitigate potential threats.
The platform integrates easily into most e-commerce systems with an API and analyzes the shopper’s digital footprint, allowing merchants to make informed decisions about whether to block, allow, or further investigate a transaction.
Key Features:
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- Analyze millions of transaction patterns in real-time using AI and apply derived logic to detect fraud
- Integrate with one API call using phone, email, and IP address to deliver real-time insights into every interaction, order, account, buyer, transaction, and opportunity
- Decisioning and risk engine provides analysis based on AI-driven rules
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- Riskified: Fraud Prevention and Chargeback Protection
Riskified offers a decisioning platform plus chargeback guarantee for e-commerce platforms to fight fraud. Their AI-based solution focuses on optimizing the checkout process while keeping fraudulent transactions at bay. Riskified’s algorithms analyze user behavior, browsing patterns, and historical transaction data supplied by its ecosystem of partners to determine fraud risks. If a transaction is flagged as potentially fraudulent, it is either denied or subjected to additional authentication.
Riskified also helps businesses resolve any transaction disputes and reduce their exposure to chargebacks by assuming liability for any approved transactions that later result in fraud.
Key Features:
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- Decisioning platform that incorporates different data for fraud detection
- Chargeback liability coverage for approved fraudulent transactions
- Help merchants dispute chargebacks due to fraud
- In-depth data analytics for risk scoring, including behavior, browsing patterns, and historical transaction data
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- Forter: End-to-End Fraud Prevention Platform
The Forter Trust Platform applies identity intelligence along the digital commerce journey to filter out fraud in the e-commerce space. The platform uses a blend of behavioral analytics, machine learning, and identity verification to protect e-commerce transactions. Forter processes and analyzes transaction data in real-time to make decisions about a transaction almost instantaneously, ensuring that legitimate customers experience a simple checkout process while fraudulent transactions are blocked.
Forter’s global merchant network is another key feature, allowing the system to benefit from collective insights and intelligence across thousands of merchants. This means that if a fraudster is flagged on one platform, Forter’s system can apply that knowledge across other businesses using its solution.
Key Features:
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- Identity graph that visually represents the fraud detected
- Behavioral analytics to identify suspicious user activity, using data from a consortium of brands
- Decisioning platform detects patterns across vast datasets for fast decisions
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- Kount: An Equifax Company for Fraud Detection
Kount’s platform prevents fraud by verifying identities and detecting synthetic IDs to prevent account takeover attacks, promo fraud, chargebacks, and more. Kount, an Equifax company, uses a robust data network and professional expertise to deliver protection that goes well beyond simply responding to losses. The AI/ML powered platform is flexible and automates fraud detection while learning and growing to protect against new threats, improving its ability to distinguish between legitimate customers and fraudsters. Its compliance software makes it easy to adhere to rules to comply with business requirements.
Key Features:
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- One platform to prevent criminal fraud, reduce chargebacks, fight friendly fraud, and recover revenue
- Builds personal profiles with hundreds of data points to fully understand who is interacting with the business
- Simplifies industry requirements and government regulations in the most efficient way possible with the least amount of consumer friction
- Regulatory reporting to monitor the evolving risk of the business
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- Sift: Fraud Prevention in One Platform
Sift offers a holistic approach to fraud detection, combining risk scoring with identity verification, account protection, and content integrity. The Sift platform combines a global network of data with AI/ML-powered models and rules to provide accessible and impactful decisioning tools. By constantly adapting and evolving, Sift empowers businesses to stay one step ahead of fraudsters, safeguarding their assets, users, and reputation.
Sift automates fraud management, helping e-commerce merchants reduce the need for manual reviews and streamline their fraud prevention processes. With the case management and reporting tools, merchants can streamline workflows, collaborate seamlessly, and gain valuable insights into fraud prevention efforts.
Key Features:
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- Automated risk scoring and fraud detection/management
- Global data and user insights are combined with automation capabilities to detect fraud at each step of the customer journey
- Customizable reporting features ensures swift resolution and minimal impact on business
- AI/ML powered platform constantly learns from transactions and activities to detect fraud, ATOs, etc.
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Conclusion: Building a Fraud-Resistant Future
The right fraud prevention tools are essential to protect both the business and customers. The solutions discussed in this guide — Zumigo, SEON, Riskified, Forter, Kount, and Sift — represent some of the top fraud detection platforms, each offering unique features to suit different business needs. By leveraging these fraud detection solutions, e-commerce businesses can stay ahead of cybercriminals, reduce financial losses, and ensure a seamless shopping experience for their customers.
Yu-Ting Huang is Sr. Director of Marketing at Zumigo. Comment or questions? Find her at on LinkedIn @yutinghuang.