New cheques for credit cards

New cheques for credit cards


In a world where online retailers never lay eyes on either their customers or the pieces of plastic they pay with, fraud can be particularly problematic on the Internet.

But a new player in the market is claiming it can help cut down credit card fraud using telephony technology which has been lifted and transported to work in the e-commerce world by a piece of artificial intelligence software.

UK-based Retail Decisions (ReD) made its move into the Australian market in September when it acquired Melbourne-based card services company Motorpass. ReD has appointed Rob Hillan to oversee the Australian operations. The company operates in North America, the UK and South Africa. "The Australian market is of great interest to us because it is very innovative [when it comes to] card technology and very strong in e-commerce, which I think is driven by geography to a large extent," said ReD chief executive Carl Clump. "We are specialists in making sure the transaction is viable, particularly on behalf of the retailer."

ReD has just launched ebitguard - a service that protects e-commerce merchants by running a number of checks on the viability of the transaction. The company does a range of philosophy checks on cards, such as looking at the number of transactions at a certain value, the bank which issued the card, geographical checks, and details from a screening database such as suspicious addresses, card numbers, IP addresses and purchase patterns.

All this information is accessed and analysed in a matter of seconds. Clump said on some occasions the process could take up to four seconds, but in most cases the check takes less than one second.

"We embody the knowledge retailers have of their own customer base," he said.

The service is paid on a per-transaction basis, so it is affordable for all players in the market. Clump is also encouraging retailers to use the services of transaction consolidators and payment service providers, adding that if retailers consider the service, which could mean the difference between the success and failure of an online venture, it is "very reasonable".

Earlier this year, Harvey Norman reported around 25 per cent of its online transactions were fraudulent.

"That 25 per cent is exactly the sort of number we could impact on. The other thing to remember is that out of those four transactions, three were good - and that impacts on those customers. We have found through our research that e-tailers experience fraud in the order of 5 to 10 per cent, which is very high when you consider face-to-face retail fraud is less than 1 per cent."

Clump said future fraud technologies would need the acceptance of three different communities - the banking sector, the retailer and the consumer.

"People often talk of ways of combating fraud in the future, but it is hard to get all three to agree, whereas ebitguard is available and working right now," he said.

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