NAIROBI, Kenya June 19 – Businesses have been challenged to integrate fraud detection tools as more transactions move online and e-commerce becomes mainstream.
Speaking at the Pesapal – Caffè session, Pesalink’s outgoing Chief Information Security Officer, Stacy Chege, noted that online fraud is a growing threat to the economy and personal financial security.
Merchants, she said, need to protect themselves and their customers from online payment fraud by integrating payment gateways like Pesapal as a secure checkpoint for online transactions.
“With the rapid evolution of the digital economy, businesses of all sizes need to re-evaluate their fraud management posture and tools. Using approaches that have proven to be most effective in combating fraud by card and online payment can minimize losses and chargebacks,” Chege said.
Card fraud and buyer’s remorse are the top instances of fraud for most merchants in Kenya. In 2021, Kenya’s National Bureau of Statistics reported that data breaches such as data extortion, data leakage and data disclosure constituted almost 71% of cyberattacks for Kenyan businesses.
“Our goal is to build people’s confidence in online transactions. We securely authenticate any customer’s card and device details when they make an online purchase before a transaction reaches the bank,” said Anthony Irungu, Head of Risk and Compliance at Pesapal.
“At Pesapal, we have an extensive monitoring system to protect our merchants and customers against online payment fraud.”
Despite the substantial risk that fraud poses to businesses, many companies lack systematic systems and procedures to prevent, detect and respond to fraud.
Some of the fraud detection tools Pesapal uses to reduce online fraud losses include payer authentication (3-D secure), device identification, suspicious transaction reporting, high-risk countries and sectors, CVV or Card Verification Number (CVN) and Address Verification Service (AVS).
“At Sarova Hotels, we follow protocols such as observing patterns in a region. We are also able to report any suspicious transactions. One way is to limit the number of large transactions, which is an essential step in avoiding chargebacks. Additionally, we are limiting the number of failed transactions that go through the payment gateway,” said Felix Musa, Sarova Group Chief Revenue Officer.
“As e-commerce continues to grow, cybercrime is on the rise. Criminals are constantly spotting opportunities to abuse people’s trust and deceive them more and more. So merchants need a full stack of payment fraud detection tools through their payment gateways.”
To protect themselves, businesses need to understand the pace, direction and pathways through which fraud is evolving and the trends shaping the future of fraud management. Cardholders and merchants should also be vigilant and make sure to be cautious when transacting online.
“Every e-commerce business owner should know that online payment fraud is on the rise. The deployment of EMV chip cards has made it harder for fraudsters to smuggle a counterfeit card at the point of sale, now all these criminal payment activities that were happening in person have moved online,” Chege added.
The fight against online payment fraud is made easier when the public is fully educated and aware of its types and the means of prevention available. People depend on the Internet; the possibility of being hacked by hackers and fraudsters increases, especially as socializing, online shopping and banking are done through personal computers or mobile devices.
Pesapal Caffé Sessions is a Pesapal initiative aimed at professionals from various sectors. The goal is to connect people, share learnings and transfer knowledge with a focus on the digital economy.