Fighting Fraud: Virtual Cash, Digital Wallets

Whether it’s remittances, virtual gift cards, or digital currencies, consumers and fraudsters alike rely on real-time payout. That means merchants need real-time fraud prevention. To prevent scams and chargebacks, businesses that deal in virtual cash must move quickly and efficiently.

That’s why businesses like OpenTable, Remitly, and Entropay that offer digital payments and gift card purchases rely on Sift Science’s large-scale machine learning to stay ahead of fraudsters.

The Challenge

With the proliferation of real-time transactions and on-demand purchasing, consumers expect near-instant gratification. In this age, imagine having your customers wait days or a whole week for the email delivery of a virtual gift card; understandably, they’d be miffed.

But with such a small window of review, how can merchants ensure that the purchases of these digital gift cards or virtual currencies are from legitimate customers, and not scammers or fraudsters buying with stolen credit card information? Digital delivery means that merchants don’t have the luxury of manually reviewing every order, lest they slow down the processing of transactions and prove themselves unable to grow their business.

Adding to this pain is that the time it takes to send, receive, and spend stolen money is mere minutes; but the chargebacks and associated fees can come weeks or months after the virtual cash is long gone. And account takeovers and fake users compound these sites’ fraud problems.

The Situation

Virtual cash and digital wallets encompass a wide array of ecommerce and mcommerce situations. Any time that you purchase bitcoins, buy an e-gift card, or transfer funds online, you’re dealing in digital payments. This virtual cash is synonymous with modern business, allowing merchants and users to connect and transact across borders, currencies, and time zones, all in the blink of an eye.

Companies like Remitly that deal in mobile payments need a fraud management solution that allows the business to scale by reducing the number of transactions that need to be reviewed. Chargebacks and fraud are often reported weeks after the actual transaction, eating into profits and proving unrecoverable once processed. With a real-time and large-scale solution, though, merchants can identify suspicious users before they even click the Purchase button, saving these sites and apps time, money, and – most importantly – keeping the good customers happy.

How to Stay Ahead of Fraudsters

Prediction and automation are the WFDs (weapons of fraud detection) that enable merchants to block malicious users while growing business. With a real-time and online solution, digital payments brands can view the characteristics of users and orders at a glance and make smart decisions fast.

Managing fraud should not only reduce your bottom line but also support the growth of your top line. Automate on smart predictions and focus your energies on only the truly malicious orders, rather than investing time and money on what turn out to be false positives. How? With a multi-faceted, layered, agile, and adaptable solution that’s customized to your business needs.

At Sift Science, we work with countless virtual payments, digital wallet, and online cash companies. We want to help you stop fraud with world-class machine learning technology, and are ready to help you get set up today! Try us out with a free 30-day trial, or send us a question anytime at siftscience.com.