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Online fraud prevention in France

Ecommerce fraud and online fraud prevention in France

Read below about payment fraud, online fraud And fraud prevention in France

Unpicking the fraud factor and regulatory environment 

France has one of the highest fraud rates in Europe, which seems to be associated with limited visibility on compromised customer details, so fraudsters can use stolen cards or other details for longer before being detected. However, a shift to more secure payment methods in recent years has helped to reduce fraud, blocking many unauthorised transactions. 

Buying online and picking up in-store is a safe and convenient payment journey for shoppers, and in France it has seen a decrease in fraud attempt rates over the past year by 0.4%, resulting in a 34% decrease in the average fraud chargeback. Mobile on the other hand has seen a slight increase in fraud attempts. The channel continues to grow in popularity, which brings with it the attention of the fraudsters. 

Interestingly, eWallets experienced a significant decrease in fraud attempt rates by volume by 3.3%. This is potentially driven by secure authentication (e.g. biometric scan). Also, perhaps less surprisingly, credit cards and debit cards experienced a drop of nearly 6% in fraud attempts, potentially driven by high security authentication procedures/mandates in place, PSD2, and so on. 

In the recent years, there has been a significant shift in customers’ behaviour moving to online shopping – and fraudsters have taken advantage of that. With a rapidly increasing volume on ecommerce transactions, it is even more pressing to have strong card authentication process and secure payment method to protect the customers from fraudulent activities such as identify theft or account take over. 

A secure payment method can prevent the customers details from being compromised and used by fraudsters, and a strong card authentication process provides an extra layer of security to ensure the transaction is initiated by an authorised user. 

It is also very important to understand what is normal versus unusual behaviour for each customer to block potentially fraudulent activities at very early stages. With large amount of data, knowing your customers can be a very complex task, but machine learning models can be extremely helpful analysing historical data for each customer to establish a “normal behaviour” and alerting unusual cases. 

Another crucial element is to have the ability to identify transaction details that are associated to fraudulent activities – and using that information to identify fraudulent rings and block other fraudulent activities. 

In terms of sector trends, with the uptick of ticketing and travel sales, fraud also increased, by 5% and 0.3% by volume, respectively. However, genuine transaction growth well outpaced the increase in fraud. Digital downloads continue to be attractive to fraudsters, seeing a 1.4% increase in fraud attempts. Retail however saw a slight dip in fraud, by 0.5%. 

Substantial regulation governs payments in France and the first quarter of 2021 saw the country enter the final phase of PSD2 compliance, stipulating that merchants implement Strong Customer Authentication (SCA) processes by September 2021 to enhance online transaction security. Soon after, the latest data from CMSPI for September 2021 suggests a European average failure rate of 29%, with France at 22%, compared to data from August 2021.