Cross-Border Fraud: The Problem That Plagues Even Online Retail Juggernauts

The competition is fierce for online retailers, so finding, converting, and retaining customers requires numerous strategies and tactics including increasing cross-border sales. Global commerce has become crucial to the success of online retailers and marketplaces. And retail juggernauts like Amazon and eBay are ramping up their efforts at increasing cross-border sales.
According to a recent Reuters article, revenue in 2017 from cross-border transactions for sellers on Amazon worldwide increased 50% from the year before. In 2014, cross-border sales at eBay were approximately 20% of its business- likely a much higher figure today. Even Google is involved with cross-border commerce indirectly via Google Shopping. Google Shopping is an advertising site where consumers can search for products. The product links on the site take consumers to online retailers where they can buy the products. Google also provides another online shopping product called Google Express.
Google Discovers Vietnamese Fraud Ring
Amazon and eBay are constantly dealing with massive cross-border fraud attempts by fraudsters located all over the world. Google Shopping is not an online marketplace or merchant in the same way as Amazon and eBay. However, Google must also deal with cross-border fraud because of its advertising services, Google Shopping in particular. CNBC recently reported how Google discovered and broke up a Vietnamese fraud ring that had set up more than 5,000 websites to fool consumers into entering their credit card information. These fraudulent websites had been advertised on Google Shopping. Consumers thought they were purchasing real products from a U.S. based company but were getting scammed by fraudsters located in Vietnam instead.
Cross-Border Fraud is on the Rise
Rising cross-border fraud rates should be a concern for all online retailers not just online retail Juggernauts like eBay and Amazon. According to a CyberSource report, the fraud rate for international orders is 1.5 times higher than that of domestic purchases. According to the Radial Annual Fraud Index Report, credit card BIN/IIN country and IP country are red flags for fraud. Some specific regions represent a higher fraud risk across market segments and verticals such as home, entertainment, cosmetics, and apparel. For example, the IP attack rate within Venezuela is 73.8%, and within India is 32.4%, for all eCommerce volume for cosmetics.
Fraud risk largely depends on the region, and while some geographical areas are low risk when it comes to cross-border eCommerce other geographical areas are fraught with fraud risk. The risk level for a region depends on a number of factors such as population density, payment security methods, and if consumer identity data is available.
A Multi-Layer Approach to Cross-Border Fraud
Google, Amazon, and eBay* all use numerous advanced technologies including machine learning to fight online fraud. These major retailers are not only using advanced technologies to detect and prevent cross-border fraud but also a multilayered approach that relies on quality data. A multi-layered approach is often used by online retailers to verify identities. A multi-layered approach refers to a portfolio approach that leverages a combination of user behavior, shopping and product information, device identification, and identity data.
Ekata provides high-quality global identity data products that companies large and small can use to improve the performance of fraud models and fraud prevention systems. We recently added 95+ million UK records to our Identity Graph and made significant improvements to identity data for the countries of Brazil, Mexico, and Canada. We’ve also just added new Australian identity data to our Identity Graph.
High-quality global identity data is a crucial part of an effective fraud prevention system, especially when it comes to preventing cross-border fraud.
To learn about our global identity data products for the retail industry, visit or contact us directly.
*It should be noted that Amazon, eBay, and Google are not necessarily Ekata customers. This post merely highlights how these companies are using advanced technologies and quality data to fight cross-border fraud.

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