Although many sources report alarmingly high rates of fraud, most of these cases are more closely related to mail fraud than to payment fraud. Merchants have the ability to use solutions to secure credit and debit card transactions and reduce their fraud rates significantly.
Solutions are available to even the smallest merchants that are affordable and effective.
Our research shows significant reductions in fraud rates since the last time we looked at this topic, due to better than expected usage rates, improved solutions, and more awareness of the threat of card fraud to Internet merchant profitability. Background Online consumer marketplaces, including auction sites, have proven themselves to be successful at both attracting users and showing profits. Merchants operating in this sector have the least resources to combat fraud activity, but auction site operators and commerce service providers can enhance visitor confidence with a layered approach to security. There are three common methodologies used to build card fraud detection solutions neural network, rules-based systems, and logisitic regression. Marketplace Inroads are already being made at reducing card fraud over the Internet.