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Online Fraud Prevention in Japan

Ecommerce fraud and online fraud prevention in Japan

Read below about payment fraud, online fraud and fraud prevention Japan

This overview was first published in ‘Japan – Cross-border eCommerce Report’, an eBook produced in association with our partner Komoju by Degica. Download your free copy of the eBook below to gain access to a comprehensive analysis of the insights that matter most when measuring the size and type of opportunities in the ecommerce market in Japan. 

Fraud Prevention

The ecommerce environment is becoming more competitive, so merchants must ensure adequate anti-fraud measures to avoid cart abandonment and revenue loss. Explaining the security measures to the customers and automated behavioural analytics leveraging AI is key for increased protection.

The Installment Sales Act issued by METI states that all merchants are required to take ‘multifaceted, multi-layered’ measures to prevent online fraud. Japan Credit Card association has published the Credit Card Security Guidelines that describe the measures that merchants, credit card companies, and PSPs should follow for online fraud prevention. The requirements for PSPs include:

  • PCI DSS compliance

  • Providing necessary assistance to merchants on fraud measures

  • Implementing online authentication, fraud detection, and address verification systems (AVS) and urging merchants to install them on their websites.

Merchants have the option of implementing one or more of the following measures:
  • Online authentication (3D Secure 2.0)

  • Card authorisation (CVV)

  • AI behaviour analysis

  • Delivery information check

Authentication via 3D Secure 2.0 is not yet mandatory in Japan, but is highly recommended for all merchants. Most PSPs provide 3D Secure 2.0 for free or on a subscription basis. KOMOJU automatically enrols all new merchants in the 3D Secure 2.0 service for free. A fraud detection software powered by artificial intelligence is also used by KOMOJU to detect fraudulent transactions before they happen.

Some CMS / ecommerce platforms such as Shopify and mark orders as high-risk or low-risk and allow merchants to manually approve them to identify potential fraudulent purchases. This measure is very helpful for merchants that are heavily targeted by fraudsters. KOMOJU integrates seamlessly with Shopify,, WooCommerce and many other popular ecommerce platforms.