Fraud prevention takes a different approach overseas, experts say
Fraud-prevention methods in retail e-commerce that work in the U.S. don’t always work as well in foreign markets, where local customs and payment systems present their own challenges and opportunities in online security, experts say.
Address verification procedures common in the U.S., for instance, are not always as effective in other countries, says Ashwini Narayanan, director of product management for CyberSource Corp., a provider of payment processing and fraud prevent services. In the UK, she notes, the password-based Verified by Visa and MasterCard SecureCode systems for entering credit card information are more effective than address verification, because the postal system grants individual residents the flexibility to change their address numbers.
One of the best means available to merchants of securing payment transactions is direct money transfers from a consumer’s bank account, an option that more European banks are offering, Narayanan says. She adds that CyberSource is working on a service that will let European consumers log onto a merchant’s bank’s web site to process direct transfers from the shopper’s bank account.
Individual retailers with experience in foreign markets have developed other practical means of preventing fraud. Art.com, which sells to more than 150 countries, for example, routinely reviews its payment transaction records to look for unusually high levels of chargebacks from particular countries, says Mike Marston, co-founder and chief strategy officer.
“Then we assess whether we want to accept credit card payments from those countries,” Marston says. If it decides against card acceptance, Art.com will ship orders only after receiving and cashing money orders, he adds.
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