Vegas is the entertainment mecca of the world … and for a few days last week it also became the anti-fraud mecca of the world. The Merchant Risk Council (MRC) held their annual conference March 13-16 – and it was big. It’s the largest global e-commerce event focused on payments, fraud, cybersecurity, and risk for companies in the mobile, retail, marketing services, data, and technology space. There were 1200+ attendees from 30+ countries there to communicate, collaborate, and learn from each other.
It’s not every day that hundreds of people in the same industry from around the world get the chance to get together and talk shop. In fact, it can often feel like we fraud and risk folk are the only people at our companies who understand what we’re dealing with – so it’s good to be able to meet with peers who understand what we are fighting for and the challenges that go with it.
Sift Science had the opportunity to speak on a variety of topics, including account takeover and different ways of building user trust. We even took home coveted MRC Industry award that recognizes companies that have made significant contributions in the e-commerce fraud space!
Here are a few learnings we took away from the conference:
More and more merchants are fighting abuse with machine learning models
- ML something that all merchants can add to their fraud tool belt
- ML can work in tandem with rules and your ops team
- There are both basic and advanced models that can be integrated into your systems, so you pick what you are comfortable with
Account takeover is here to stay … and will only grow more prevalent
- Data breaches are increasing, and people usually reuse passwords across multiple sites
- Most companies don’t know how to fight ATO effectively, since they don’t want to drive away existing good customers with invasive challenges
Friendly fraud is the next big thing that needs to be solved
- Everyone sees this as a problem, but no one has a really good solution for it yet.
Alternative forms of payment (things other than credit card and cash) will continue to take up market share, especially in Asia
- E-wallet usage is projected to increase from 11% now to 19% in 2020
- As a result, by 2020, credit card usage is projected to decrease from 61% to 48% of online transactions
Industry e-commerce fraud loss rate for 2016 was 0.7% compared to 1.1% in 2014 and 0.8% in 2012.
- Order rejection rate increased from 2.4% in 2014 to 3.1% in 2016.
- I wonder how much of these orders are false positives (aka legitimate orders that were incorrectly cancelled)?
- Overall win rate for merchants was 38%
- This was primarily due to low win rates in the digital and travel sectors.
The next MRC conference in Vegas has already been set for March 19th – 22nd, 2018. Hope to see you there!