As more businesses join the online marketplace and the number of payment sectors increases, e-commerce fraud also continues to rise. But being exposed to fraud isn’t a financial risk your e-commerce business can afford to take.
Chargebacks cost merchants nearly $11.2 billion in lost revenue in 2015, and nearly $118 billion was left on the table due to false declines in 2014.
The best way to protect your business against the financial effects of fraud is to prevent it from ever happening in the first place. One way to do this is by implementing a comprehensive solution that keeps you on top of evolving fraud patterns, removes your liability for updating solutions, helps manage your main KPIs and more.
Selecting the right option from among managed services and outsourced solutions is critical; the right decision can both benefit your business and improve your bottom line.
An outsourced fraud management approach – such as a managed services solution – prevents fraud by using comprehensive chargeback management strategies and a team of experienced analysts. It’s a proactive and effective method of combating fraud, in contrast to the reactive approach that traditional outsourcing solutions take.
When thinking about implementing a managed services solution into your e-commerce business, consider these benefits:
- Fewer False Declines
A multilayered fraud protection approach uses comprehensive data to quickly identify fraudulent behavior, preventing suspicious transactions from being processed and removing a business’s fraud liability. And because transactional decisions are made in real time, it provides a seamless online ordering experience for your customers.
- The Entire Solution Is Fully Managed by a Dedicated Outside Team
The experienced, trained managed services team stays on top of the latest attack methods and focuses solely on protecting businesses. This lets your management team concentrate on critical business tasks — not fraud prevention.
- It Eliminates the Need to Establish Fraud Management Standard Operating Procedures (SOPs)
A managed services solution comes with its own SOPs, which means you don’t have to invest time and money to establish your own. An added benefit is that the managed services solution can immediately get to work on protecting your business against fraud.
- It Complements Existing Fraud Prevention Teams
With a managed services solution, you don’t have to replace your in-house fraud management department (if you have one). In fact, some managed services providers prefer to work alongside an in-house fraud manager, because it gives them access to a company representative with business insight.
- Decisions Are Optimized
Fraud managed services solutions don’t automatically reject transactions. Instead, they make recommendations only after a comprehensive review of each piece of transactional information on a flagged transaction.
- Additional Tools Can be Added
Additional fraud prevention tools can easily be integrated into a managed services solution, resulting in a comprehensive solution. Additionally, you can outsource the responsibility of adding new tools or updating your current solution to new business scenarios. This removes the full liability of fraud from your business.
- Management Is Simplified
Managed services solutions remove the burden of updating tools and adapting to evolving fraud attacks, letting businesses focus on managing their balance of main KPIs such as chargeback rates, approval times and approval rates.
How a Managed Services Solution Can Improve a Merchant’s Bottom Line
By implementing a comprehensive fraud prevention strategy, you’ll quickly see a reduction in the direct costs of fraud, such as lost inventory, un-recouped shipping expenses and chargeback fees.
But you can also save on the indirect costs of terms of time, money and resources by:
- Eliminating the time and effort employees must spend reviewing suspect transactions.
- Minimizing the resources required to recruit, hire and train a fraud management team.
- Establishing predictable fraud management costs.
- Making transactional decisions based on objective data to increase the approval of legitimate transactions.
- Hiring a team that stays on top of the latest fraud techniques and keeps pace with fluctuating sales volume.
Adding a fraud managed services solution may be just what your business needs to avoid becoming a statistic. Download ClearSale’s latest e-book, “Is a Fraud Managed Services Solution Right for Your Business,” to learn more about how this solution can help your business fight off fraudsters, reduce fraud and false declines, and increase customer confidence and revenue.