Even prior to the global coronavirus outbreak, the incentives and opportunities for online payment fraud have become substantial. Last year ecommerce represented over 14% of total global retail sales, totaling more than $3.5 trillion dollars.1
Now with the impact of COVID-19 and the accelerated shift of socially-distanced consumers to digital commerce channels, it's inevitable that incidents of online fraud and sophisticated schemes will continue to keep pace. For merchants, the increase in fraudulent transactions can mean a big decrease in revenue: Juniper Research predicts that global merchants will lose a combined $130 billion between 2019 and 2023 via card-not-present (CNP) fraudulent transactions.
Keeping up with fraud types and identifying effective solutions can be a daunting, time-consuming challenge as merchants are in business to sell their products and services, not fight fraud. Merchants are looking for tools to help on multiple fronts: to protect against losses from fraudulent credit card activity, to mitigate chargebacks, and to unblock revenue from overly aggressive or simplistic filters. In addition, such tools need to be sufficiently easy to navigate and use, allowing merchants to focus on their own core businesses.
With merchants' needs top of mind, we are launching Fraud Protection. Fraud Protection gives merchants an integrated solution that leverages the deep intelligence of the PayPal and Braintree networks, a vast array of data analytics, and state-of-the-art machine learning. Fraud Protection adapts to changing fraud patterns and provides the flexibility to choose rules and filter settings specific to merchants' businesses.
Data makes the difference
When it comes to fraud management solutions, the big differentiator is data. Why? Because more relevant data facilitates more automated learning that can be applied to risk decision-making. And with over 20 years of global data and risk decisions that are based on access to both buyer and seller sides of more than 12 billion transactions a year, PayPal and Braintree have a rich ecommerce and mobile dataset to learn from.
In the case of Fraud Protection, that learning is applied to the process of evaluating transactions for suspected fraud. Fraud Protection aims to help merchants more easily view and manage the relationship between the fraud they catch in real-time and the chargebacks they may incur later. Finding the ideal operating point between fraud rejections and chargebacks requires a solution that learns from both and adjusts accordingly. Our machine learning capabilities balance those data results for optimal performance and were named best-in-class in an independent study of fraud and advanced machine learning platform vendors.
Better transparency and control for merchants
Fraud Protection provides a foundational solution that’s easy to enable and configure. The initial set-up requires little effort and merchants can set their own operating points to control their experience:
Increased transparency and visualization: The dashboard presents a holistic view of Total Processing Volume reviewed by the tool, fraud rejections, and fraud chargeback value over time, plus transaction history for insights into fraud event triggers.
Business-need customization: Fraud Protection unlocks personalized, out-of-the-box filters -- starting the very first day it’s enabled. Filters are based on a merchant’s total payment value, chargebacks, and age of the account, providing the best filter set based on past transactions and behaviors.
Filter recommendations: As the tool gathers more data about a merchant’s business, it will recommend changes to filters to further optimize rejections and chargebacks.
Real-time filter testing: Merchants can test and assess the impact of filter changes based on past transaction data before implementing the changes.
Fraud Protection is now available
Since June 2019, select merchants have been participating in our Fraud Protection pilot program with successful results. Pilot merchants in regions around the globe have realized fewer fraud rejections and chargebacks.
Fraud Protection is now generally available to all Braintree merchants and is fully integrated into our platform.2 Merchants can easily enable the tool and access the new UI from the Braintree control panel to better protect their businesses from payment fraud.
eMarketer, June 2019 https://www.emarketer.com/content/global-ecommerce-2019 ↩
Minor integration changes may be required for existing Braintree customers to pass device data. ↩