Payment Asia Preemptive Fraud Management Practices for Merchants
About Anka Yip: Anka Yip, a professional web programmer and system developer, is the IT Development Manager of Payment Asia Technology Limited. He has experience in tailor-making enterprise solutions for years. He is now leading his IT development team to integrate emerging technologies into traditional business models.
Anka Yip | IT Development Manager | Payment Asia
Ecommerce is no more merely the privilege enjoyed by big
Merchants and enterprises had to spend USD 2.66 and around
merchants and enterprises that have massive infrastructures
2% of revenues on average for every dollar of fraud, and the
and resources. Small businesses carrying a smartphone or tablet
fraud cost rose to USD 3.48 if the transactions are about digital
are already enough to join the endless network of ecommerce.
goods sales or conducted primarily through remote channels,
The growth of ecommerce, however, arouses the concern of
accounting to about 2.5% of revenues on average. The report
fraudulent transactions, implying that effective and qualified
simply shows fraud is a lucrative business.
fraud management is also a must in minimizing the lost suffered by merchants or businesses. Considering the special situation in
The two generations of fraud monitoring
the Chinese market, Payment Asia (PA) shifts the ‘fraudgate’ from
PA is a veteran in dealing with fraudulent transactions in the
standing at the rear to staying at the forefront by preemptively
internet world, where the legal framework of commercial and
screening out suspected transactions.
financial criminal procedures is still very challenging. When facing online fraud, merchants may often choose to surrender, as
The management of fraud
they do not find it worthwhile to spend unscalable time and legal
Fraud is commonly seen in the business world, and it is unavoi
cost to report and claim the loss. PA is then determined to help
dable in the Internet as well. From phishing, identity theft, and
the vulnerable merchants by identifying potential perpetrators in
pagejacking to merchant identity fraud, perpetrators would not
preliminary stages to lower the risk of fraud.
waste any chances to take advantage of the stolen money, personal property and sensitive information. The exponential
In the beginning, PA implemented a fraud scoring system and
growth of ecommerce could transfer all the black and white
offered some basic rulesets based on the database provided by
transaction records into computer servers, but it also provides
merchants. Rulesets changed from time to time. Our data analysts
room for hackers and cybercriminals to deprive the information
successfully and continuously identified the characteristics of
via the Internet. What businesses could do is take precautions
known fraud cases and updated our rulesets. We might then block
and keep monitoring online fraudulent activities. Thus, fraud
the high-risk fraud transactions based on the scores recorded by
management comes to exist and becomes the core of ecommerce
our system, and later on follow up with merchants to find out more
solutions.
about their involved clients. This is the first generation of PA’s fraud management practices for merchants. ➔
The 2017 report of LexisNexis True Cost of Fraud evaluated the effect of fraudulence activities across private businesses and government agencies in the US, and especially in ecommerce, financial services, and digital lending.
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PAYMENTS AND COMMERCE MARKET GUIDE 2018 - 2019 | (Cross-border) Ecommerce
However, individual identities or information might be easily obtained by some clusters or groups. The traditional monitoring is not enough anymore to tackle potential fraud. Therefore, PA is developing the second-generation technology to expand the coverage of monitoring. We run all transactions in our models and connect the fraud cases with cluster analysis to improve the scoring mechanism.
About Payment Asia: Established in 1999 and based in Hong Kong, Payment Asia is a leading ePayment and
The role of AI in detecting fraud
ecommerce company across Asia, providing the most
To process a huge amount of transaction data and to pinpoint
secure and innovative technology for online and mobile
potential fraud, PA adopts artificial intelligence to conduct big
payment solutions to local and global businesses. Our
data analysis of past and current transaction records, as well
omnichannel payment solutions provide a broad range
as to summarize the possible fraud patterns and highlight them
of payment methods including credit card, debit card,
as parameters. The more parameters are put in the AI-driven
China Union Pay and eWallet which comprise the
machine learning, the higher the threshold of fraudulence is
elements of digital marketing and artificial intelligence.
against cybercriminals. At the same time, business market changes every second, and so does the way the corresponding
www.paymentasia.com
cybercriminal acts. PA would adjust the weight and choices of parameters based on the trend of fraudulent activities to ensure our machine learning principles and practices are sticking to the
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dynamics of ecommerce market and its fraudsters. Until now, PA has screened hundreds of thousands of trans actions. The frequency of suspected fraudulent activities is effectively lowered from several cases per day to one case per several days. PA’s fraud screening helps merchants to conduct KYC compliance that would reduce the risk of losing money and credentials, as well as the threat of leaking sensitive information.
From quality to loyalty Quality brings you loyalty. It is always the key to success in the business world by offering qualified goods and services to customers, and it is how business confidence is built. As fraud ulent transactions harm merchants’ credentials and revenue, eventually disrupting the market order, PA provides comprehensive ecommerce solutions and goes hand in hand with merchants to keep scam activities under control and maintain the market for the benefit of all lawful parties. Given the potential of the Chinese ecommerce market, PA will never stop adopting the latest technology and combine it with our built-in market sense to secure and drive up merchants’ businesses in China.
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PAYMENTS AND COMMERCE MARKET GUIDE 2018 - 2019 | (Cross-border) Ecommerce