Combating the biggest fraud threats in e-commerce purchases

It is a challenging task to overcome the three biggest fraud threats in E-Commerce transactions. Generally most of us do not give a second thought during an online purchasing process. The fraud may occur during the purchasing of grocery deliveries, big-ticket appliances like home appliance, expensive gadgets, books and media devices. The increase in digital traction’s, in recent times, comes with challenges for E-Commerce organizations like customer dissatisfaction and mostly fraud and cheating which is disturbing.

The following are the three frauds that generally affect E-Commerce organization:

Lost revenue, by any other fraudulent means; by using a hacked account or stolen credit card when an unlawful or prohibited purchase is made on their platform

Customer satisfaction issues and lost revenue is when a legitimate customer purchase is wrongfully marked as fraud
Increased operational expense, to detect fraud and manage charge backs

Dynamics 365 for e-Commerce

Microsoft’s fraud protection journey

Microsoft’s E-commerce business system grew, along with great accuracy and efficiency besides being scalable across different lines of business.

The engineering team first had to change its overall outlook in order to adapt this new system. At the same time, the team also began to analyze the customer journey to understand their short comings in the data sets. The team traced the actions as a potential buyer takes which culminate in making a purchase considering the indications of fraudulent activities that could be termed as irregularities.

Armed with this information, the team launched machine learning (ML) capabilities to intelligently predict fraudulent transactions and even to approve or deny them accurately. Moreover, nearly 6% of transactions were still prompting manual reviews. The team had to apply artificial intelligence (AI) and machine learning elements for generating thorough learning models in order to reduce manual reviews. This exercise also resulted in increasing the efficiency in catching fraudulent transactions with fair amount of accuracy.

However, when Microsoft approved a flagged transaction and forwarded to the banks for processing, some payments were rejected, a result of bank systems lacking Microsoft’s trust, knowledge and signals. To resolve this issue, the engineering team created a KPI called profit efficiency, which is basically an equation where the maximum profit for a product sale is in the denominator and the actual profit is the numerator.

Now, the engineering team understood that years of experience detecting fraud on billions of annual transactions could be applied for improving Microsoft enterprise customer own processing systems. Customers can take advantage of the innovations built by Microsoft for its own fraud protection effort by delivering fraud protection models as a Dynamics 365 offering built on Azure. This has crowned in the creation of Dynamics 365 Fraud Protection.

The revolutionary creation of the fraud protection network, Microsoft brings merchants’ de-identified data into a consortium that helps algorithms understand more about fraud patterns and become increasingly accurate in detecting fraudulent transactions. The future of the online E-Commerce seems to be safe and secure but yet the customers have to tread with caution.

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