Big and Small Steps Taken to Slash CNP Fraud Losses in UK

Wednesday, October 10th, 2018

CNP Fraud Losses in UK Drop for First Time in 7 Years

While many other countries in Europe continue to deal with rises in card-not-present (CNP) fraud, the UK saw a drop last year, according to FICO’s 2017 “Evolution of Card Fraud in Europe” report. For the first time since 2010, the UK’s losses due to CNP fraud dropped by more than 5% from £432.3 million in 2016 to £409.3 million in 2017.

Through innovation and research and development in fraud prevention platforms, the UK was able to curb CNP fraud while its neighboring countries and those throughout Europe have continued to see fraud levels steadily increase.

Achieving this was not simple. Financial institutions and merchants in the biggest e-commerce markets have led the charge in plugging money into fraud prevention technology, specifically those directed at merchants that accept online and mobile payments. Others have taken smaller actions. They have contacted chargeback insurance providers to get coverage to protect against fraudulent purchases. Whatever step you take, reducing fraud is something that merchants cannot ignore.

What’s Helped Slap Back Fraud?

Additionally, savvy retailers likely led to the significant drop in card-not-present fraud. As they become more aware of online fraud schemes, they have introduced more stringent checks and balances, such as using address verification and requesting shoppers provide the security codes displayed on the back of credit cards.

Part of the reduction in fraud may be due to the European market’s demands for innovative prevention mechanisms. They constantly retooling their efforts using a combination of real-time artificial intelligence, machine learning, and other fraud mitigation efforts, including obtaining coverage from chargeback insurance providers. Some of the improvements have to do with tools getting more sophisticated. For example, tools and strategies include being enterprise-level, all-channel operable that integrate data seamlessly into real-time decisions and enact automated customer interactions and authentication that do not require actual people to intervene.

Reducing Friendly Fraud

All parties – cardholders, merchants, issuers, and credit card companies have benefited from improving levels of transaction information, sharing it at the right time with the right parties, and creating a shared feedback loop among all involved. This approached helped eliminate unwanted chargebacks caused, mostly, by identity theft, as well as friendly fraud. By better managing the transfer of information among the involved parties, they are able to resolve disputes at the time they occur and mitigate issues further down the line that impact their bottom lines.

In Conclusion

As cyber attackers get more sophisticated, it is critical that merchants address any inefficiencies or vulnerabilities to protect their businesses from excessive chargebacks. Merchants assume all the costs of a chargeback, including the refund of the sale, the cost of loss merchandise, and fees, as well as the time, effort, and staffing costs to deal with it.

Most merchants choose to use a combination of strategies to combat fraud. If you contact a chargeback insurance provider and determine it’s not for you or you want to implement coverage with other strategies, we can help.

We can help you determine if your merchant service provider goes and beyond what’s expected when it comes to fraud protection and chargeback mitigation tools. Best Payment Providers (BPP) is an experienced comparison company that takes the guesswork out of finding the best accounts, tools, and pricing in the payments industry. BPP guides you through the process by reviewing contracts, rates, and fees at no charge to you. Understanding credit card processing, keeping chargebacks down, and navigating the payment industry is difficult, let us help.