Automated Order Verification For Fast & Convenient Checkout

Automated Order Verification For Fast & Convenient Checkout
A few years ago, who would have imagined that you could shop for anything from jewelry to furniture
while sitting on your couch? Thanks to the explosion of e-commerce, online shopping has become more
than just a fad. Online shopping has become a necessity for people who have little time or patience to go
from store to store in search of that perfect bag or scarf!
But like al things good, ecommerce comes with its own set of issues; one of the biggest issues is online
fraud. According to CyberSource, online merchants in North America lost an estimated $2.7 bil ion to
fraudulent orders in 2010*.
Although there has been a steady decline in fraud losses over the last couple of years, the situation is stil
worrisome for the fast growing e-commerce industry.
Checks to Fraud
To prevent online fraud, e-retailers conduct manual reviews of the orders received. Online merchants set
up fraud-review teams that perform manual checks on al orders received to see if they are fraudulent.
There are several problems with this system. First, it's expensive. Online merchants have to hire staff
members to review these orders, and these reviewers have to be paid according to industry standards.
Add to that the cost of training and you are staring at a huge expenditure.
Second, the manual review process is not efficient. Reviewers can only process a certain number of
orders in a day and the quality of their work will depend entirely on their experience, knowledge as wel as
the quality of the processes established to review orders.
Third, there's always the possibility of human error when you're conducting manual reviews. This could
lead to rejection of genuine and legitimate orders and cause further losses to online merchants.
Final y, manual review of orders is a time-consuming activity. Customers have to wait for their orders to be
processed, validated and delivered. It can lead to unnecessary frustration and put them off a merchant for
good!
Need for Automation
An automated phone verification system is one of the most effective tools to keep fraudulent orders at
bay. Since it does not rely on human checks, the automated system is a lot more efficient than manual
reviews.
Not only does an automated phone verification system reduce operational costs for online merchants, but
it also leads to a better conversion rate for legitimate orders. That could be why automated fraud
detection was identified as one of the highest priorities of the year for North American online merchants.
To understand how a typical automated phone verification system works, we can take the example of
TeleSign's fraud defense process. This process is a combination of two products:
1. PhoneID: This product identifies the risk level of an order based on the characteristics of the
phone number provided during a transaction.
2. TeleSign Verify: If the transaction is flagged as high risk, this product will verify the phone
number provided. The premise is that a fraudster is unlikely to provide a contactable phone
number.

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The entire review process becomes much more simplified, streamlined and consistent. The genuine and
legitimate orders get automatical y accepted, while only the suspicious orders go through the manual
review process. This leads to a quick turnaround time for processing orders.
Source:
*cybersource.com/news_and_events/view.php?page_id=1865

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