The Ecommerce Fraud Prevention Software has become a must-have tool in your cybersecurity suit, as a recent survey by Merchant Savvy revealed a concerning statistic: nearly half (47%) of the ecommerce companies polled had fallen victim to payment fraud within the last two years.

The Top 5 Ecommerce Fraud Prevention Software can be found below. However, before you jump into that section, let’s explore what fraud prevention is in the e-commerce business and the features you should consider when selecting a solution.

What is Ecommerce Fraud Prevention Software?

Ecommerce Fraud Prevention Software serves as a digital sentinel for online businesses, carefully scrutinizing each transaction to detect potential risks. It utilizes sophisticated algorithm-based analyses to gauge the legitimacy of every online order and payment, significantly decreasing the chances of fraud.

Online businesses, especially those operating through unsecured websites or mobile devices, are prime targets for cybercriminals. This vulnerability accentuates the importance of adopting effective fraud prevention solutions.

By aggregating and analyzing data from various sources, this software can make informed decisions about transaction approvals. It pinpoints anomalies, safeguarding businesses from potential chargebacks and associated revenue losses.

Moreover, for seamless functionality, ecommerce fraud prevention software typically integrates with other essential tools like ecommerce platforms, shopping cart systems, and web security applications.

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Features to look for in Ecommerce Fraud Prevention Software

Illustration of Ecommerce Fraud Prevention

Selecting the right fraud prevention software for ecommerce store can seem daunting, but understanding the essential features can guide your decision-making process. A competent ecommerce fraud prevention software will not only protect your revenue but also foster trust among your customers.

For a product to be considered effective in the category of ecommerce fraud prevention, it must:

Utilize advanced algorithms to vigilantly monitor potential fraudulent or high-risk activities online.
Establish clear rules to discern and assess anomalous purchasing behaviors in ecommerce.
Offer streamlined workflows for reviewing, approving, or declining transactions that pose a high risk.
Adhere to stringent regulations aimed at preventing online fraud and safeguarding sensitive data.
Furnish detailed reports and insights on scrutinized transactions, highlighting chargebacks and any false declines.

Now, here are the features you must consider when investing in Ecommerce Fraud Prevention Software:

Bank Identification Number (BIN) Lookup: Working in conjunction with Secure Customer Authentication (SCA) offered by payment gateways, BIN lookup provides insights into the card type used. While gift cards are often linked to fraudulent activities, it’s essential to be cautious with debit or credit card transactions as well.
Device Fingerprinting: This feature offers insights into the devices visitors use to access your platform. By examining their software, hardware, and generating cookie, device, and browser hashes, you gain a clearer understanding of user behavior.
Data Enrichment: By linking the data you possess (like an IP address) to external databases, you can glean more about your users without requiring additional input from them. This enhances security without compromising the user experience.
Custom Rules with Blacklisting/Whitelisting: While many software solutions offer this, it’s vital to ensure your choice allows you to set bespoke rules. These rules can help detect and counter specific fraudulent techniques you’ve encountered before.
Reverse Social Media Lookup: A modern tool in the fraud prevention toolkit, this feature examines users’ social media presence. A conspicuous absence might raise red flags.
IP Address Analysis: Gain insights into a user’s geographical location (user’s city, state, country, and even specific coordinates in some cases) and detect potential usage of proxies, emulators, or anonymous networks like Tor.
Machine Learning (ML): Incorporating machine learning can elevate the software’s efficacy. ML systems can suggest risk rules derived from past data, ensuring the software remains adaptive. However, it’s crucial to understand the kind of ML being used, such as the distinction between whitebox and blackbox machine learning.

Best Ecommerce Fraud Prevention Software (Top 5)

Disclaimer: The information in this article is based on online research and user reviews. We have not conducted hands-on testing for each tool mentioned.

1. Signifyd

The Vanguard of Ecommerce Security

Positioning itself as the “champion of ecommerce,” Signifyd ensures that while safeguarding transactions, it respects the integrity of your customers, ensuring they never feel unjustly targeted.

Going deeper into its advanced technology, Signifyd is built upon two foundational pillars: the Commerce Protection Platform and the Payment Optimization Platform. The Payment Optimization Platform further bifurcates into four integral modules:

The Console: This serves as the central interface, ensuring easy navigation and control.
Decision Center: Here, merchants can articulate and modify their store policies, ensuring they remain aligned with their business objectives.
Insights Reporting: A data-centric module that allows businesses to deep-dive into their transactional data, extracting actionable insights.
Onboarding Hub: Crafted with the user in mind, this module ensures a seamless and intuitive experience for merchants, minimizing friction and maximizing efficiency.

Who Should Opt for Signifyd?

Enterprises that are integrated with platforms like Salesforce, Magento, or Shopify will find Signifyd particularly beneficial. It’s tailor-made for businesses seeking a solution that, once set, requires minimal intervention, letting them focus on what they do best: driving ecommerce success.

2. Kount

Harnesses a Global Network to Safeguard Ecommerce Transactions

Kount stands out prominently in the realm of ecommerce fraud prevention, primarily owing to its remarkable Identity Trust Global Network. Boasting an impressive repository of 23 billion data points, Kount’s network captures user actions and profiles spanning 250 countries and 75 distinct industries. The depth and breadth of this data, meticulously accumulated over 13 years, position Kount as an authoritative figure in the domain.

Here are Kount’s offerings:

Command: This is Kount’s holistic solution designed specifically to address challenges associated with card-not-present (CNP) transactions, ensuring seamless yet secure online transactions.
Central: Tailor-made for payment service providers, Central offers specialized tools and insights to facilitate smooth payment processes while mitigating risks.
Control: Addressing the rising concern of account takeovers, Control serves as a robust defense mechanism, ensuring users’ account credentials remain uncompromised.

Kount’s prowess is further endorsed by its adoption by global leaders in both retail and finance. Renowned retailers like PetSmart and Staples trust Kount for their online transaction security. Simultaneously, esteemed financial institutions, including Barclays and Chase, leverage Kount’s technology to fortify their digital operations.

Who is Kount Ideal For?

Businesses that understand the invaluable insights derived from merchant-shared intelligence regarding potential fraudsters will find Kount indispensable. Furthermore, if seamless integration with major ecommerce platforms like WooCommerce and Magento is on your checklist, Kount emerges as a top contender.

3. SEON

Ecommerce Security Through Dynamic Data Integration

When it comes to fraud prevention software for ecommerce, SEON emerges as a beacon of innovation and efficiency. Tackling a spectrum of fraudulent activities—from transaction and return fraud to the more intricate triangulation fraud—SEON’s prowess is undeniable.

But what truly sets SEON apart? The answer lies in SEON’s strategic utilization of alternative data combined with dynamic friction.

This approach ensures that while fraud rates plummet, the customer’s purchase journey remains as seamless as ever. Instead of static barriers, SEON dynamically adjusts its security measures based on real-time data, ensuring that legitimate customers enjoy a frictionless shopping experience, while potential threats are effectively neutralized.

Why Opt for SEON?

If you’re in pursuit of a sophisticated fraud prevention solution that harnesses the power of real-time data insights without compromising on the customer experience, SEON is the answer. It offers the perfect balance between robust security and an uninterrupted shopping journey, making it an ideal choice for businesses aiming for both safety and customer satisfaction.

4. Sift

Pioneering Modern Ecommerce Fraud Prevention with a Billion-Dollar Vision

Emerging from the esteemed incubator, Y Combinator, and boasting a valuation that touches the billion-dollar mark, Sift has rapidly ascended to the zenith of startup successes. This rise is not merely attributed to its impressive credentials but also its unmatched prowess in fraud protection, especially within the ecommerce domain.

Trusted by industry giants in the card-not-present (CNP) space—names like Airbnb, McDonald’s, and Doordash are testament to its effectiveness.

Exploring Sift’s offerings:

Digital Trust and Safety Suite: This comprehensive suite houses all of Sift’s cutting-edge APIs, meticulously crafted to combat online fraud, reinforcing the brand’s commitment to digital security.
Account Defense: Addressing the increasingly prevalent threat of account takeovers, Sift’s Account Defense solution provides robust protection, ensuring user credentials remain uncompromised.
Payment Protection: This innovative solution seamlessly marries the power of shared databases with the precision of machine learning. The result? Enhanced security that dynamically adapts to emerging threats.
Dispute Management: Tailored for content moderation and protection, this module ensures that platforms remain both user-friendly and secure, striking the perfect balance.

Why Should Businesses Consider Sift?

For businesses seeking a comprehensive, adaptable fraud prevention solution, Sift stands out. It offers a suite of products that can be tailored to specific needs, including a specialized module dedicated to chargeback management. With Sift, businesses can be assured of a multi-faceted approach to security, ensuring both operational efficiency and customer trust.

5. Nethone

Revolutionizing Ecommerce Security with Deep Data Insights

Emerging from the vibrant fintech startup ecosystem of Daftcode, Nethone embarked on a mission with a clear vision: to transform the internet into a realm characterized by safety and transparency for every user.

At the heart of Nethone’s offerings is the Nethone Guard. This state-of-the-art software harnesses the power of Nethone’s unique Profiler technology. What makes it stand out? The ability to meticulously gather a staggering 5,000 data points for each user. These data points span a comprehensive spectrum, encompassing social media footprints and a wealth of open-source intelligence (OSINT) data.

But data collection is just one part of the equation. The true magic lies in how Nethone processes this data. Employing a sophisticated whitebox machine learning model, these myriad data points are analyzed in real-time. The objective? To ascertain a “here-and-now” risk score at every juncture of the customer journey.

This dynamic risk assessment offers invaluable insights into a customer’s authenticity and underlying intentions, ensuring that genuine users enjoy a seamless experience while potential threats are effectively neutralized.

Why Opt for Nethone?

For businesses that prioritize not just the efficacy but also the transparency of their fraud prevention tools, Nethone is an ideal choice. Its solutions are designed to provide insights that are not only accurate but also easily decipherable by human readers. In essence, with Nethone, businesses can enjoy the best of both worlds: cutting-edge technology and user-friendly interpretations.

Preventing Ecommerce Fraud without using Fraud Prevention Software

If you’re operating within budget constraints and cannot immediately invest in a comprehensive Ecommerce Fraud Prevention Software, there are proactive steps you can take.

The essence of safeguarding your ecommerce platform from potential fraud doesn’t solely lie in detecting fraudulent activities but in implementing robust preventive strategies to mitigate risks from the outset.

1. Prioritize Regular Security Checks for Your Online Store

Ensuring your online store is a fortress against cyber threats is essential. One effective way to achieve this is through consistent security evaluations. Consider these crucial checkpoints:

Software Updates: Is your shopping-cart software and its plugins current and devoid of vulnerabilities?
SSL Certificate: Ensure your SSL certificate, which encrypts data transfers, is active and functioning optimally.
Payment Security: Confirm that your store adheres to the Payment Card Industry Data Security Standard (PCI-DSS), ensuring secure payment processes.
Data Backups: Assess the frequency of your online store backups. Regular backups can be a lifesaver in case of unexpected data losses.
Password Strength: Are you employing robust passwords for critical access points such as admin accounts, hosting dashboards, CMS, databases, and FTP?
Malware Monitoring: Regularly screen your website for any malicious software that might compromise its integrity.
Communication Encryption: Guarantee that all communications between your store, customers, and suppliers are encrypted, ensuring data privacy.
Plugin Management: Periodically review and discard any inactive or outdated plugins that might pose security risks.

2. Prioritize PCI Compliance for Secure Credit Card Transactions

For any online store that facilitates credit card payments, adhering to PCI compliance is non-negotiable. What exactly is PCI? It’s an acronym for Payment Card Industry. The PCI Security Standards Council, a consortium of leading credit card companies, establishes and oversees PCI standards. Their objective is to fortify the security of credit card transactions within the payment ecosystem.

In simpler terms, being PCI compliant signifies that your online store and its underlying business processes align with these stringent security standards, ensuring safe and secure card transactions for your customers. If your store operates on a SaaS-based ecommerce platform, the good news is that most of these platforms inherently offer PCI compliance, easing your compliance journey.

3. Implement Address Verification Service (AVS)

In the world of online transactions, ensuring the authenticity of every purchase is crucial. One reliable tool in this quest is the Address Verification Service, commonly referred to as AVS. What does it do?

Offered by most credit card processors and issuing banks, AVS serves as a real-time safeguard against potentially suspicious credit card activities. Here’s how it works:

When a customer initiates a purchase, they provide a billing address. AVS cross-references this submitted address with the billing address the issuing bank has on record for the cardholder. This verification is seamlessly integrated into the merchant’s request for credit card transaction authorization.

Should there be a mismatch between the two addresses, the AVS system is poised to take action. It either declines the transaction outright or earmarks it for further review, ensuring any potential fraudulent activity is promptly addressed.

4. Mandate Card Verification Value (CVV)

One of the simplest yet most effective security measures an online merchant can implement is requiring the Card Verification Value (CVV) for all transactions. But what is CVV?

For cards like VISA, MasterCard, and Discover, the CVV is a three-digit security code located on the card’s back. In contrast, American Express cards sport a four-digit code. Sometimes referred to as the Card Security Code (CSC), this number plays a pivotal role in transaction security.

By mandating the input of the CVV for every purchase, you’re ensuring a crucial security checkpoint: verifying that the customer physically possesses the card they’re using.

5. Set Purchase Thresholds for Enhanced Security

One strategic approach to bolstering your online store’s security is by establishing purchase limits. But how does this work?

By closely analyzing your historical order patterns and revenue streams, determine a cap for both the quantity of purchases and the cumulative dollar value permissible from a single account within a 24-hour window. Such limits serve dual purposes:

They act as a deterrent for potential fraudsters attempting bulk or high-value fraudulent transactions.
In the rare event that fraud does transpire, these thresholds ensure that any potential financial exposure remains contained, safeguarding your store’s financial health.

6. Ensure Consistency Between IP and Credit Card Addresses

Every online order leaves a digital footprint in the form of an IP address. Think of this as a distinct digital signature, much like an address in the virtual world. This address, composed of a sequence of numbers divided by periods, signifies the unique identification of each computer when it interacts over the internet.

Now, here’s the interesting part: This IP address can offer insights into the geographical location, typically narrowing down to the city or region, of the individual placing the order. Cross-referencing this location with the billing address of the credit card being utilized provides a crucial layer of verification. If there’s a discrepancy between the two, it’s akin to a flashing neon sign signaling potential fraud.

7. Prioritize Physical Shipping Addresses

In the intricate game of online fraud, perpetrators are always on the lookout for ways to cover their tracks. One common tactic? Opting for non-traditional shipping addresses. Here’s why:

By using PO boxes or alternative anonymous locations, fraudsters cleverly shield their actual whereabouts. The logic is simple: if there’s no physical address, there’s no possibility of direct confrontation or intervention.

For vigilant online merchants committed to minimizing fraud risks, a clear directive emerges: steer clear of non-physical shipping addresses. This includes not just PO boxes but also virtual addresses linked to freight forwarders. A tell-tale sign of such freight forwarder addresses is the inclusion of a container number, often formatted like “726 Dock Road Suite 300 #KXQ-582899328.”

By adopting this rigorous approach to shipping, you’re not only securing your business operations but also ensuring that your customers receive their orders in the most transparent and trustworthy manner.

Wrapping Up:

We hope by now you have a sufficient understanding of Ecommerce Fraud Prevention Software and are ready to choose the best one that suits your ecommerce store.

While complete eradication of fraud might be an elusive goal, being equipped with the right knowledge and maintaining constant vigilance can significantly tilt the scales in our favor. Understanding the limitless tactics and strategies employed by fraudsters is our first line of defense.

By staying alert, continuously updating our knowledge base, and leveraging the insights shared in this guide, businesses can effectively minimize the impact of fraud. Remember, in the battle against ecommerce fraud, knowledge isn’t just power—it’s our strongest shield.

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Features to look for in Ecommerce Fraud Prevention Software