To help risk managers more quickly decide which online orders to approve and which to hold for further review, CyberSource Corp. is building out a four-part risk management application recently upgraded with real-time consumer data like current wireless and Voice over Internet Protocol telephone numbers.
"Our goal is to get the right orders to the right reviewers and help them make an accurate decision," says Cory Siddens, CyberSource product manager for risk.
The company`s Decision Manager covers four dimensions of buyer validation:
Global validation, which checks information entered by online purchases against telephone and postal address databases. This will alert risk managers, for example, when an area code doesn`t match the rest of a telephone number or when a street address doesn`t match a ZIP code-possibly uncovering an attempt by a criminal to process an order with a fictitious address or phone number. CyberSource recently upgraded this service by integrating it with real-time data on telephone and address listings from TARGUSInfo, which maintains electronic connections with telephone and postal address databases.
Single merchant purchase history, which lets retailers set rules regarding buying activity. To guard against criminal buying patterns, for example, a merchant could have the Decision Manager software trigger an alert whenever the same customer account attempts to purchase more than one plasma TV within the same week, but allow multiple purchases within the same time period for smaller items like batteries. Merchants can also develop negative and positive lists of customer accounts, putting on a negative list and triggering an alert for any account that, for instance, has been tied to chargebacks.
Purchase device tracking and "digital finger-printing," which monitors the online ordering activity and characteristics like home country tied to particular computers and IP addresses. This can trigger alerts or block transactions from particular countries known for high levels of online fraud or from particular computers that have multiple users.
Multi-merchant purchase history, which uses a database of more than 1,000 merchants and more than 10 million transactions per month from a trailing six-month period to provide statistical risk models. "The model might say that if a single credit card is used six times within an hour, it has a certain level of risk," Sidders says. Merchants could then set rules to trigger alerts or block transactions for that frequency of card activity, he adds.
The cost of operating Decision Manager is under 20 cents per transaction and based on the merchant`s level of volume, CyberSource. The cost to use TARGUSInfo, which is used in more isolated cases when additional information is needed, is about 17 cents per transaction, CyberSource adds.