Vesta's General Manager of Asia Pacific, Shabab Muhaddes shares his thoughts with Fintech Times Asia on how to stay ahead of the threats.
Ecommerce merchants tend to focus on the financial hit from fraud chargebacks, and rightly so since that is where the problem originates. But sadly, that is not where it ends.
Within Asia, especially, Southeast Asia, the rate of attempted fraud is up to 12 times greater than the global average, and online merchants lose an average 1.6% of revenue to direct fraud each year. Even so, most online merchants will tell you that they don’t have a fraud problem. It may surprise you to hear this, but for the most part, we agree. If merchants had an ongoing fraud problem, the card brands wouldn’t allow them to continue processing on their networks. The question is, what did they do to bring fraud down to an acceptable level? You may have heard it said, “It’s easy to eliminate fraud. All you have to do is decline every order.” While that is an obvious exaggeration, there is also some truth in it. Fraud loss and revenue loss are like two opposing weights on a scale – when fraud loss goes down, revenue loss goes up. The safeguards implemented by online merchants today have cost them more than the problem they set out to solve.
Read the full perspective in The Fintech Times publication on page 27 here.