LexisNexis has launched Retail Fraud Manager, a platform designed to help online merchants detect and combat card-not-present fraud by automating and analyzing the transaction-review process, the company said on Wednesday.
"Most online merchants want to get to a point to automate their transaction-review process so they can identify good orders and isolate the bad or fraudulent orders," Dennis Becker, LexisNexis' vice president, said in an interview. "We developed a fraud-prevention platform that is all about maximizing revenue and minimizing fraud losses."
The Alpharetta, Ga., company's previous fraud-management service consisted of individual components instead of an all-in-one platform, Becker said.
Retail Fraud Manager software streamlines and organizes online merchants' data for more efficient fraud-risk management. Participating merchants integrate "front-end identity risk-scoring" with a workflow platform and fraud analyst review system to their existing online point of sale systems, Becker said.
The integration enables merchants to assess risk quickly at the time of the transaction and automate the process to minimize the number of orders being reviewed manually, Becker said.
The platform also includes a service called Chargeback Defender Risk Score, designed to help merchants detect potential fraud by verifying identification data for both the billing and the shipping address, especially if they differ.
Chargeback Defender operates alongside a system called Chargeback Defender Device Score, powered by the fraud technology provider Kount Inc. of Boise, Idaho.
The systems work together to analyze each transaction, including the type of device that initiated it and the Internet protocol address.
"The system can let a merchant know that, while a transaction may come from Denver, the IP address is actually located in Romania," meaning it most likely is fraudulent and will be flagged for review, Becker said.
The system also takes information about the consumer and searches a historical database. In some cases, merchants may ask consumers preanswered personal questions during checkout to verify their identities, he explains.
LexisNexis charges merchants based on transaction volume and on what they use within the platform, Becker said.
Online-only merchants are typically hit with 2,033 fraudulent transactions each month, Javelin Strategy and Research said in a recent report. The number is so high because merchants often are unable to determine whether the consumer placing the order is legitimate, said Jim Van Dyke, a co-founder and president of the research firm in Pleasanton, Calif. Moreover, many issuers will not refund online merchants for "bad transactions" because there is no way to authenticate the consumer, he said.
However, a fraud-management system such as LexisNexis' works to "make connections and check that transactions are legitimate through historical data," enabling merchants to catch flag fraudulent transactions before the orders are processed, Van Dyke added.
