What Is an Ecommerce Fraud Protection Platform?
An ecommerce fraud protection platform is used to help track, monitor, and detect fraudulent activities in an online store. These can range from uncovering illicit transactions made through schemes like affiliate fraud to even detecting inflated clicks and false impressions created by bots or click farms.
The structure of the ecommerce fraud protection platform utilizes a combination of a 5-step analytical approach:
- Pattern recognition
- Digital behavior
- Machine learning
- Text analysis
- Visual analysis
This approach examines all user behavior by analyzing the intent behind every interaction to detect possible online activities that could lead to fraud.
Related → What is Affiliate Fraud? [+How to Prevent It]
Why Use an Ecommerce Fraud Protection Platform Now?
One obvious reason: To protect ecommerce businesses from fraud.
But a better question is - why now? While it’s true that fraud has been existing since the inception of ecommerce, its growth rate within the last two years has been extraordinary.
Between 2020 and 2021, the global ecommerce fraud grew by 18% resulting in over a $20 billion loss. And reports believe the pandemic was a significant catalyst to this effect [*].
During the pandemic, the ecommerce industry witnessed an unprecedented surge in consumer purchases. While that led to an increase in online sales, it also brought in new fraudsters.
According to 2022 Juniper Research,
“The pandemic has meant that merchants have had to quickly move into ecommerce, exposing them to fraud which they are unprepared for.”
In addition, during a 2021 Statista survey involving online merchants across the world, 75% of participating merchants reported a net increase in fraud attempts since the beginning of the pandemic.
The new reality is this—every day, fraudsters are developing new schemes to defraud your ecommerce business. As a result, integrating an ecommerce fraud protection solution into your business is important now more than ever.
Related → What Is Ad Fraud? [+Types & How to Prevent It]
What Are The Features of Ecommerce Fraud Protection Platforms?
1. Automatic Bot Detection System
This feature relies on host-monitoring techniques to help deploy triggers (e,g., CAPTCHA, cryptograph) to discern a bot from human interaction. The bot detection system can inspect every web session activity during interaction using the server-side and client-side connections. Some use cases of this system include payment fraud, account takeover (ATO), login credentials stuffing, fake account creation, fraudulent traffic, etc.
2. Bot Tagging (BTAG)
The BTAG feature is a bot identifier that uses bot information to redirect the request of a bad bot to a special sub-path. Once they visit the BTAG version of the site, you now have an easy way to identify these bad actors and exclude them from future targeting marketing campaigns.
Pro tip → Edgemesh offers a BTAG feature that automatically analyzes the network and the history of user actions to detect bots and users that continually click on ads automatically but do not generate conversions.
[Source: Edgemesh’s Ad Protect]
Related → What Are Botnets? [+7 Ways To Prevent An Attack]
3. Real-time Insights Dashboard
This provides a visual representation of reports gathered from fraudulent activities across all mediums of user interaction.
Pro tip → Edgemesh’s Ad Protect provides real-time insights on wasted ad spend on a per-source, per-campaign, and even on a per-medium level.
[Source: Edgmesh’s Ad Protect]
4. IP Address Monitoring
Fraudsters are known to switch IP addresses, often using VPNs to access geo-restricted ecommerce stores or campaigns. Fortunately, with the IP address monitoring feature, merchants can flag transactions and website visits based on a sudden change in IP address.
5. Fraud Threat Scoring
This feature uses a scoring system to quantify the risk certain user actions pose to an ecommerce business. The system calculates this score based on the assigned value of several known trigger points or indicators.
Below is a typical fraud scoring model ranging from the lowest risk level (zero) to the highest risk level (hundred).
6. Device Fingerprinting
This feature helps merchants collect information on the user's device during an interaction. This includes browser, operating software, IP address, language, plugins, and every other unrestricted information about a user’s device. With this, merchants can block devices known to be used by bad actors from interacting with their websites or apps.
7. Machine Learning
This feature employs an artificial intelligence (AI) model to automate the building of systematic data analysis that can automatically predict fraud tendencies. If done correctly, the system learns from historical data and sends accurate analysis to update features like bot-detection, device fingerprinting, alert systems, IP monitoring, and better handling of false positives.
Pro tip → Edgemesh’s machine learning feature uses a combination of real-time bot detection and IP reputation to detect fraudulent clicks and then tag these visitors for real-time exclusion from ad campaigns.
10 Best Ecommerce Fraud Protection Platforms & Tools
1. Edgemesh Ad Protect
Edgemesh is an ecommerce acceleration company known mostly for its head(ache)-less, easy-to-deploy solution that helps ecommerce businesses improve overall customer experience. Ad Protect is a new upgrade to this offering. It aims to protect companies against ad fraud at the infrastructure level.
Ad protect uses a combination of an integrated system of machine learning to analyze the network used (VPN, datacentres, etc.) combined with the history of users’ actions to detect bots and users who continuously click on ads but don’t generate conversions. Additionally, this feature tracks the ad click rate per visitor and assigns a tag to the user and their IP address.
According to Jacob (Jake) Loveless, CEO of Edgemesh,
"Edgemesh Server offers brands a comprehensive solution that both accelerates their online storefronts and now helps to accelerate their business by protecting their ad budgets. Digital media buy is one of our customers' largest costs, and with Ad Protect we're helping customers automatically defend that spend against bots, click farms, and competitors so they can put money behind ads that target real customers."
Unlike other ad protection solutions, Edgemesh’s Ad Protect monitors every request, header, SSL certificate, the speed with which the visitor moves from page to page, and even the browser "fingerprint" to provide a highly effective way to detect malice and prevent ad fraud.
[Case Study] → How Edgemesh is Helping Easy Standard Improve Customer Experience
2. Kount
Kount is a digital identity trust platform that uses artificial intelligence to protect ecommerce against account takeovers, payment fraud, and account creation fraud. Kount’s AI-powered solution uses a model that evaluates every interaction on a network and weighs the risk to predict its impact on their customer’s business.
Kount’s AI reports the evaluation of each fraudulent activity using a transaction safety rating called Omniscore. The omniscore ranges from .1 (unsafe) to .99 (safe). Kount offers flexible, hands-off customization capabilities for customers to tweak several data points in their fraud prevention decisions based on their desired outcome. Kount powers over 9,000 customers across 75+ industries in 250+ countries.
3. Riskified
Riskified is an ecommerce fraud management platform that uses machine models to help ecommerce companies make informative decisions in mitigating a fraud attack. Riskified integrates with every user interaction throughout their purchasing process.
On the Riskified dashboard, customers get access to real-time insights on shoppers’ behavior, fraud trends, and payment issues. In addition, its intelligent machine learning algorithm offers a full suite of conversion-oriented tools, including a chargeback guarantee, policy protection, PSD2 optimization, Deco, and account security.
Related → What Is Clickjacking? [+Examples & Prevention]
4. ClearSale
ClearSale is a fraud management and chargeback protection solution that combines cutting-edge statistical technology with sophisticated artificial intelligence to monitor shoppers' behavior for potential fraud threats.
ClearSale offers API integration with major ecommerce platforms (Shopify, BigCommerce, Magento, Magento2, and VTEX) to spot red flags in pre-purchase actions. And for every flagged transaction, ClearSale’s human experts review the entire process to ensure there are no false declines.
ClearSale also covers all card-not-present transactions, including email orders, web orders, mail orders, virtual terminal orders, and telephone orders.
Related → 10 New Changes on Shopify Online 2.0 [2022] — Merchant Guide.
5. Signifyd
Signifyd provides enterprise-grade fraud protection solutions for ecommerce companies. The company leverages machine learning models to garner insights and user intent from its extensive commerce network.
Signifyd also promised a 100% financial guarantee against fraud and abuse and prides itself on core solutions like payment optimization, abuse prevention, account protection, and fraud protection.
6. Sift
Sift offers integrated enterprise-grade end-to-end solutions as an approach for its customers to grow their revenue without worrying about online fraud risk. In addition, the platform boasts of its custom machine learning models that utilize over 16,000 signals in analyzing and scoring fraud threats.
Sift also has a global network of 34,000+ sites and apps that lets the company stay ahead of emerging fraud trends and process over 70 billion events per month. Sift’s holistic protection gives customers access to “sift connect” along with payment protection, dispute management, content integrity, account defense, and passwordless authentication.
7. Fraud.net
Fraud.net is AI-powered fraud management and prevention for online merchants. Its enterprise-grade fraud solution combines collective intelligence, cognitive computing, and rules-based decision engines to detect fraud in real-time, at scale.
Fraud.net is the world’s most advanced robust data analytics and mining platform—all of which customers can access and combine multiple data streams into easy-to-understand charts and graphs.
8. Ravelin
Ravelin offers custom-built AI solutions for businesses to detect possible fraud signals faster while accepting more genuine payments. The award-winning fraud detection solution uses fraud-level insights to optimize conversion under PSD2 and maintain control with agnostic authentication. This protects merchants from account takeover, marketplace fraud, and promotion abuse.
Ravelin’s graph network shows merchants’ new and existing accounts with direct or indirect links to fraud. With this, customers can set preferences to block or allow those types of accounts.
9. Fraudlabs Pro
Fraudlabs Pro provides fraud detection solutions for online merchants to prevent CNP (card-no-present) fraud. The sophisticated fraud solution provider is built on intelligent machine learning that inspects and validates every online order before checkout.
Fraudlabs Pro customers also gain access to a large network of blacklist data from a global merchant network to detect fraud and reduce chargeback losses accurately. Fraudlabs Pro has more than 24 ready-to-install plugins, extensions, and add-ons that integrate well with major ecommerce platforms, including Shopify, WooCommerce, BigCommerce, Magento, Open Cart, Presta shop, and others.
10. NoFraud
NoFraud is an ecommerce fraud prevention and checkout solution that protects businesses from several forms of fraud attacks, including account takeovers, payment fraud, chargeback fraud, etc. NoFraud combines AI models with proactive human oversight to generate accurate fail or pass decisions.
NoFraud promises real-time order screening with a 100% financial guarantee against chargeback losses. One of the core benefits of NoFraud is its ‘Order Approval Rate’ that helps merchants handle false positives and avoid declining valid orders. The platform also includes a high-risk transaction level ranging from low (safest) to high (riskiest).
Want to see how Edgemesh can help you protect your store from fraudsters? → Get a demo
How To Choose An Ecommerce Fraud Protection Platform
Online merchants are often caught in the web of making quick and irrational decisions once they sense an attack on their store. While finding a working solution, they end up causing more problems.
Unfortunately, this scenario is no different in choosing an ecommerce fraud protection platform. While all ecommerce fraud protection solutions offer one general solution, to protect your business from fraud, they aren’t for every ecommerce business.
Related → Is Headless Ecommerce The Best Fit For Your Business In 2022
Let’s say you run an ecommerce business that averages between 5K to 7K monthly traffic and $2,000 gross revenue. Subscribing to fraud protection solutions that cost $1,000 monthly is not ideal. Not only will that ruin your bottom line, but your business will also have little to no chance of growing. You must consider the below factors before choosing a fraud protection platform for your online store.
- Does the platform offer selective or combined offerings?
- What is the pricing and pricing model?
- What’s the method of handling false positives?
Selective vs. Combined Offering
Every -commerce fraud protection platform offers either of the two options. With the selective offering, you get to pick and choose the type of products that fits your business. In comparison, the combined offering provides you access to all tools in the platform at no extra cost.
Pro tip → If you run a small to a medium-sized ecommerce store, opt for selective offering, so you only pay for the tools you’re actively using.
Want to see how Edgemesh can help you protect your store from fraudsters? → Get a demo
Pricing and Pricing Model
Protecting ecommerce businesses from fraud is difficult, as it entails using in-depth artificial intelligence models to create a predictive analysis of possible fraud threats. Most ecommerce fraud protection solutions are quite pricey compared to other tools. The average solution costs $1,500 per month, and some even go up to $5,000 depending on the offering. We recommend going for solutions within your budget that won’t break the bank.
The solution’s pricing model is another consideration. Some offer monthly pricing; others will lock you into an annual contract with no option to cancel. We advise you to look into all available information on a platform before purchasing a plan.
False Positives Handling
False positives can make or break your pre-purchase process, making you lose out on customers. If a fraud protection solution offers rigid anti-fraud pre-purchase settings, ensure you inquire about their handling of false positives. If it’s managed entirely by bots, then the system might not be able to differentiate real users from fraudsters accurately. Ideally, your fraud protection platform should have a team of human reviewers overseeing and cross-checking all false positives to know if it’s fraudulent.
Stop Losing Money to Fraud!
Like many others out there, your online store is experiencing fraud attacks at an unprecedented level. Fraudsters are increasing in numbers, and so are the tools they use to execute their malicious attacks. A single account takeover attack can jeopardize decades of hard work, and you’ll be left to rebuild from scratch.
But there’s a solution. With an ecommerce fraud protection platform, you get access to several tools to monitor user activities and prevent fraud. Like the self-learning capabilities of AI in machine learning, fraud protection platforms can recognize fraud patterns and recommend actionable responses in real time.
Use Edgemesh Ad Protect
Most ecommerce fraud protection platforms’ approach is preventing internal fraud, i.e., fraud happening on your store (website). This approach leaves your marketing campaigns vulnerable to ad fraud attacks. According to Statista, the global cost of ad fraud is estimated to be $65 billion and is set to double in the next few years.
Edgemesh’s new solution takes it a step further to protect your ecommerce company and ads from fraud. With Ad Protect, Edgemesh can detect bots trying to act like humans in less than 0.4s (4 milliseconds) and redirect the fraudulent clicks on your ad to a subpath. This way, they never get to interact with your ads, and you never have to pay for fake clicks.
Want to see how Edgemesh can help you protect your store from fraudsters? → Get a demo
