Fraud prevention: Establishing fraud profiles with device fingerprinting for higher conversion rates

By Wolfgang Berner on 14. November 2013 in Market Insights
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Fraud prevention is always a challenging task. Merchants, and therefore their PSP/ISO must have a solid understanding of typical fraud profiles in their industry and what risk checks will help them to prevent fraudulent transactions. One effective tool within the manifold offering of fraud prevention tools is device fingerprinting.

 

How does device fingerprinting work?
For every device a fingerprint is generated. This fingerprint enables the recognition and thus a permanent, reliable identification of devices. It is created automatically without user interaction, as the devices automatically provide the required attributes. This is done by including JavaScript files on a payment page, which calculate the device hash ID. In PAY.ON’s payment page solution – COPYandPAY – device fingerprinting can be activated simply through configuration. This fingerprint is then sent along with the transaction and is used in a risk check (similar to account blacklisting) to find out if the same device was used to perform fraudulent transactions before and, if so, is consequently rejected. Generally only device data – for example from a PC, mobile phone, PDA or video game console – is viewed.

How does device fingerprint affect conversion and merchant business?

With device fingerprinting features, merchants can minimize their chargeback rates and at the same time increase their conversion rate by in average up to 15%. Problems like accounts with fake identities or multiple orders in a short space of time can be detected effectively before the shipping process starts. And combining device fingerprinting with geo location checks even allows the detection of unusual device usage in surprising locations for the same account. Typical fraud prevention instruments remain ineffective in those scenarios as they only evaluate risk for real existing persons and not devices.

In brief, with device fingerprinting merchants can grow conversion and leverage merchant business successfully.

PAY.ON offers the most extensive range of fraud management tools in the market. This includes 120 PAY.ON specific risk checks as well as various third-party risk and fraud management checks that are fully integrated into the payment platform. The sophisticated risk checks, offered by PAY.ON, provide payment providers and merchants with a powerful tool for fraud reduction on a global scale.

Wolfgang Berner

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