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Education

Combating fraud post Merchants need a secure solution that doesn’t require lots
of information from customers and can easily be embedded
COVID, 2021 and beyond into workflows. Device identification is a potential solution
because customers use devices for online processes.
Used by services such as sales, advertising and fraud
prevention, device ID assigns a unique ID to a device. This
ID is used later when a user attempts to access a website
or service. The ID is tracked across various user actions
and transactions and enables the service to differentiate
one entity from all other entities using the site or service.

Device ID is helpful for fast authentication of returning
users, quicker workflows with less action required from
users, and being able to detect and track suspicious and
fraudulent behavior. However, as appealing as device IDs
are, they alone are not enough to protect merchants and
By Nicholas P. Cucci customers.
Fluid Pay LLC What you can do
s digital transformation accelerates at an Here are three other processes that can help protect
unprecedented rate, the ROI for credit card customers and merchants:
fraud increases in tandem. Fraudsters decide • Authentication: This is the process of establishing
A where to spend their time and resources the the quality, uniqueness and validity of an end user’s
same way normal people evaluate the cost versus value identity within your fraud solution.
of large, important purchases. As digital currencies and
cashless societies spread around the globe, it's imperative • Profiling: This compares the profile a consumer
to know the risks associated with new technologies that presents against known good and bad populations to
can directly impact your finances. Online payments have determine if there is risk involved.
been booming for the past 10 years. COVID further accel- • Blocking: This refers to methods of using device
erated this ecommerce/cashless boom. identification to prevent high-risk activity and block
the return of known bad customers.
Online payments are growing year over year;
unfortunately, so is fraud. Here are salient statistics from Following are three profiling and blocking steps to take:
Intuit and Experian: 1. Decide on your strategy: Create rules for your
• The most frequent payment method identified in customers based on your industry and their behaviors.
total 2020-2021 fraud reports was credit cards. (Such as IP velocity checks, account velocity checks,
• Credit card fraud was involved in 459,297 fraud and CVV and AVS.) Quite a few pre-rules, which would
identity theft instances reported in 2020. take effect before a transaction is processed, can be
• People 30 to 39 years old reported the most instances used.
of identity theft; those older than 80 reported the 2. Profile your customers: Examine transactions based
fewest instances of credit card fraud. on the rule sets you have created. Here you can see
• Instances of identity theft by credit card fraud what will need to be adjusted. You may need to limit
IP addresses to some degree. This part will help you
increased by 44.6 percent, from 271,000 to 394,000 determine a baseline for safe transactions.
in 2020.
• Identity theft involving new credit card accounts 3. Block the fraudsters: As bad actors come into play,
this is where you can stop negative transactions before
increased by 48 percent in 2020. they are re-attempted—even when re-attempted on
Why this matters to businesses another of your merchant accounts. This is crucial to
long-term success.
Why should businesses care about this? The possibility of Nicholas Cucci is the co-founder and COO of Fluid Pay LLC and former
fraud emerges if a merchant depends only on information director of marketing for NMI. Cucci is also a graduate of Benedictine
provided by the user during the application process. There’s University and a member for the Advisory Board and Anti-Fraud
always a chance the information provided is fraudulent
or even stolen. One way to avoid this is to authenticate Technology Committee for the Association of Certified Fraud Examiners.
the user with additional data the user provides. However, Cucci was also named a Top 40 Under 40 by the Electronic Transactions
users don’t like to go through complicated processes and Association in 2019. Fluid Pay LLC is the only 100 percent cloud-based
provide more information than the bare minimum. This Level 1 PCI payment gateway processing transactions anywhere in the
can create another problem by increasing churn rates. world. Contact Nick at nick@fluidpay.com.
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