The report provides information about the use of payments fraud detection and prevention methods used in the e-commerce channel and how merchant respondents rated the methods. When asked where merchants devoted the most resources toward fraud mitigation, they indicated CNP in the online channel. Merchants largely rely on older mitigation tools such as security code and address verification, but some new tools are emerging. The emerging CNP fraud tools that merchants find most promising include artificial intelligence, facial and voice recognition, and multi-merchant purchase velocity checks.
“This study provides great insights into what merchants find effective for mitigating card-not-present fraud today and which emerging mitigation technologies they are beginning to use. Retailers could use the information from the report to assess and enhance their current fraud mitigation strategies,” said Guy Berg, vice president of the Payments, Standards, and Outreach Group at the Minneapolis Fed.
The report also analyzes usage and effectiveness ratings of information-sharing partnerships that help merchants identify fraud attacks and exchange threat information.
Access the full 2018 Fighting Fraud in the e-Commerce Channel: A Merchant Study.
The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.