The threat of fraud is significant, persistent and ever-changing, and an unfortunate reality for online merchants trying to grow revenue. Sophisticated and organized fraudsters are patient enough to play the long game for a big score, smart enough to impersonate real customers and frequently switch strategies. Juggling the need to satisfy customer expectations for quick, frictionless transactions while responding to changing threats is a major challenge for merchants. But it’s necessary to build a lifetime relationship with customers. Several especially troubling trends in e-Commerce fraud emerged this past holiday shopping season. Here are three of the top threats and tips for defending against them.

By necessity, all e-Commerce companies are constantly on guard against card not present (CNP) fraud. Aside from the financial losses incurred from the refunded amounts, chargeback fees, and merchandise replacement costs, there is also the looming threat of losing the ability to do business — payment processors will stop working with a merchant if the chargeback rate exceeds a certain threshold.  Those on the front lines of this ongoing war against fraudsters are the analysts tasked with screening out the fraudulent transactions. They have to satisfy conflicting requirements: brief turnaround time for order accept/decline decisions, minimizing chargeback losses, and keeping the total cost of fraud prevention low. These fraud management teams are the Rodney Dangerfields of e-Commerce, since they usually don't get much respect from senior management, who often view their department as a cost center rather than a revenue protector.  It's no surprise that merchants are quick to adopt and hesitant to abandon tools that are simple, quick, cheap, and seem to do a good job of rejecting fraudulent orders while accepting the legitimate ones. This is how we ended up with e-Commerce fraud prevention tools like blacklists.  Blacklist Basics Here's how blacklists work: When merchants approve an order…

Zumigo has expanded its Assure suite of mobile device location and identity verification products to offer services designed to mitigate credit card fraud when card numbers get into the wrong hands.  The cloud-based service integrates with banks’ and merchants’ processing systems to verify the identity and location of a user’s mobile device along with credit card ownership to prevent fraudulent transactions. Discrepancies are flagged as possible fraud, and can save merchants and banks expenses ranging from fraudulent purchases and chargebacks to reissuing credit cards.